Energy Drink Stock to Buy on the Dip

CELH has short squeeze and oversold potential as well

Deputy Editor
Sep 26, 2023 at 1:21 PM
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Energy drink stock Celsius Holdings Inc (NASDAQ:CELH) has fallen sharply from its Sept. 8 record high of $206.85, currently trading at $168.19 at last glance. Now might be a good time to buy in on the dip, though, if past is precedent, as this pullback has brought CELH near a historically bullish moving average. 

The shares are within one standard deviation of their 80-day moving average and per Schaeffer's Senior Quantitative Analyst Rocky White, Celsius Holdings stock has run into its 80-day moving average five times in the last three years. For the purpose of this study, White defines that as the equity trading above the moving average for 80% of the time over the past two months, and closing north of the trendline in eight of the last 10 sessions. After five of those pullbacks, CELH was higher one of month later 60% of the time, averaging an impressive 16.6% pop. 

Short interest has been on the rise as well, and represents an impressive 23.6% of the stock's available float. It would take shorts over eight days to cover their bets, at CELH's average pace of trading. Plus, the security's 14-day relative strength index (RSI) of 30 is just on the cusp of "oversold" territory, which typically indicates a short-term bounce. 

When speculating on CELH's next move, options look like a good way to go at the moment. This is per the stock's Schaeffer's Volatility Index (SVI) of 47%, which ranks in the low 14th percentile of its annual range, meaning options traders are pricing in low volatility expectations. 

celh sep26

 

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