Networking Stock Set Up for Bulls

It looks like the perfect time to pick up premium on CIEN

Jan 28, 2020 at 12:59 PM
facebook twitter linkedin

Networking specialist Ciena Corporation (NYSE:CIEN) seems to be setting up nicely for bulls. The shares just spiked to the upside from a recent consolidation pattern stemming from a December earnings breakout, hinting the stock is prepared for another move higher. With the previously resistant 30-day moving average still playing catch-up, the upside potential for CIEN looks strong.

cien stock jan 24

On the sentiment side, the 6% of CIEN float dedicated to short interest may not seem like a lot, but consider that much of this was added a few months back when the shares were trading down below $40 -- telling us many short sellers are holding losing positions and could be compelled to cover. If so, short-covering tailwinds could push Ciena higher.

Plus, data from the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows an unusual interest in long puts, based on the 50-day put/call volume ratio of 0.97 that ranks in the 84th annual percentile. An unwinding of these bearish positions could help drive CIEN stock higher. Our recommended call option has a leverage ratio of 6.7 and will double on a 14.3% move in the underlying security.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this CIEN commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.


Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners