Tailwinds May be in Store for this Software Stock

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

by Research Dept.

Published on Feb 11, 2020 at 11:27 AM
Updated on Feb 11, 2020 at 11:27 AM

Software specialist Citrix Systems, Inc. (NASDAQ:CTXS) has been a major outperformer on the charts. Support from the 20-day moving average alongside a late-January post-earnings bull gap has the equity up 15% year-over-year. With CTXS also at its round 10% year-to-date mark, it looks like the ideal time for bulls to bet big.

WKALT CTXSD with 20MA Feb 7

Digging deeper, it looks like shorts are in covering mode. Short interest added on 13.3% during the most recent reporting period, and now accounts for 3.7% of the stock’s available float. At Citrix Systems stock’s average pace of trading, it would take short sellers a full week to buy back their bearish bets.

Plus, analysts are not overly enthusiastic on the stock, with 10 of the 12 in coverage calling CTXS a “hold” or worse. This could set the security up for a round of tailwind-inducing upgrades.

Lastly, volatility expectations look attractive for premium buyers, too, based on the Schaeffer's Volatility Index (SVI) of 17%, which ranks in the 18th annual percentile. What's more, our recommended call has a leverage ratio of 8.8, and will double in value on a 10.9% gain in the underlying stock.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this CTXS 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.


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