Can Ciena Corporation (CIEN) Claw Atop Resistance?

Ciena Corporation (CIEN) bulls are emerging as the stock enjoys a halo lift

by Andrea Kramer

Published on Apr 14, 2015 at 1:15 PM
Updated on Jun 24, 2020 at 10:16 AM

Ciena Corporation (NYSE:CIEN) is flying high this afternoon, up 8% at $21.51, after sector peer Alcatel Lucent SA (ADR) (NYSE:ALU) confirmed that it's in advanced merger talks with Nokia Corporation (ADR) (NYSE:NOK). What's more, option traders are rolling the dice on more short-term upside for CIEN, with calls trading at three times the average intraday clip.

Potential buy-to-open action has been detected at the April 21 and 21.50 calls, as buyers bet on CIEN to extend its journey north of the strikes through Friday's close, when front-month options expire. More ambitious bulls are seemingly buying to open the May 23 call, which will move into the money if CIEN topples $23 -- a familiar roadblock, and territory not charted in more than a year -- by the close on Friday, May 15, when the options cease trading.

Today's appetite for calls marks a change of pace for CIEN traders. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity sports a 10-day put/call volume ratio of 0.96 -- in the 85th percentile of its annual range. In other words, option buyers have picked up CIEN puts over calls at a much faster-than-usual pace during the past two weeks.

On the charts, Ciena Corporation (NYSE:CIEN) recently bounced off its 200-day moving average, and is on pace for its highest close since early July. As alluded to earlier, though, the stock has struggled to surmount the formerly supportive $22-$23 region, which has acted as a roadblock for more than a year.

Daily Chart of CIEN since December 2013 With 200-Day Moving Average


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