Canadian Solar Stock Surges on CEO Update, Earnings

Short-term CSIQ options are attractively priced at the moment

Managing Editor
May 30, 2019 at 9:59 AM
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Shares of Canadian Solar Inc. (NASDAQ:CSIQ) are surging this morning, last seen up 7.8% at $19.07. The alternative energy provider reported a narrower-than-expected first-quarter loss, and named Yan Zhuang as acting CEO, while its current CEO Dr. Shawn Qu takes a medical leave of absence. Plus, the company's Chief Financial Officer (CFO) Huifeng Chang said "profitability will improve as we move through 2019."

Canadian Solar stock sold off sharply after touching its three-year peak of $25.89 on March 1, due mostly to a post-earnings bear gap on March 21. CSIQ managed to find a foothold atop its 200-day moving average, and has been able maintain a 33% year-to-date lead.

Short selling has revved up on CSIQ, with short interest rising 19.6% during the past two reporting periods alone, and now accounting for 8.7% of the stock's total available float. At Canadian Solar's average pace of trading, it would take shorts just over four days to buy back their bearish bets.

Lastly, short-term options premiums are fairly tame at the moment. The stock's Schaeffer's Volatility Index (SVI) of 69% ranks in the 23rd percentile of its annual range, meaning near-term contracts are pricing in relatively low volatility expectations.

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