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 Apr 20, 2015 at 5:32 PM

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

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

The Nevada Discovery That Could Jeopardize Chinese Dominance
Click to continue to advertiser's site.
SHOP Stock Fails to Shake Off Downgrade
Raymond James downgraded Shopify to "market perform" from "outperform"
AutoZone Offers Emergency Time Off for Employees
AZO puts have been popular
The Nevada Discovery That Could Jeopardize Chinese Dominance
Click to continue to advertiser's site.