Can Ciena Corporation (CIEN) Claw Atop Resistance?

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

Apr 14, 2015 at 1:15 PM
facebook twitter linkedin

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


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 


300x250 - Banner 3 - v1