Energy Drink Stock Sports Intriguing Entry Point

CELH is in "oversold" territory

Deputy Editor
Jan 30, 2024 at 10:58 AM
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Energy drink stock Celsius Holdings Inc (NASDAQ:CELH) has been trading choppily since its Sept. 8 record high of $68.95. Both the stock's rallies since then were cut short at the $63 region. Last seen 0.1% lower at $51.95, CELH is at risk of closing below $52 for the first time since mid-December. 

CELH Chart January 302024

Short interest has moved higher over the last month, adding 6.3% in that time. The shares sold short represent 28.4% of the stock's available float, and, at the equity's average pace of trading, it would take shorts over seven days to cover their bets. Plus, the security's 14-day relative strength index (RSI) of 29 is just on the cusp of "oversold" territory, which typically indicates a short-term bounce. 

Plus, Celsius stock is within one standard deviation of its 200-day moving average. Data from Schaeffer's Senior Quantitative Analyst Rocky White shows the equity has run into this trendline three times in the last three years. After one of these pullbacks, recorded a 6% pop. A move of similar magnitude would put CELH back around the $55 area.

When speculating on Celsius stock'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 51%, which ranks in the low 22nd percentile of its annual range, meaning options traders are pricing in relatively low volatility expectations for CELH right now.


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