Celsius Holdings Inc. (CELH) shares are on a tear Thursday, bouncing back from recent downtrends that have plagued the company. The sudden surge in price is being fueled by heightened interest from retail traders, who are flocking to the stock after a period of significant losses.
The stock is trending heavily across various social media platforms, especially on Stocktwits and Reddit’s r/WallStreetBets. This increased chatter suggests that traders are noticing several bullish indicators that point to a potential rebound.
One of the key factors contributing to the rally is the belief that CELH stock has reached oversold territory. Technical indicators, such as the Relative Strength Index (RSI), are signaling that the stock has been sold off significantly and is likely due for a correction.
Traders are also pointing to support levels established in 2022 as a reason for optimism. These levels represent price points where the stock has historically found buying interest. Additionally, the high short interest in Celsius shares is creating a potential catalyst for a short squeeze. A short squeeze occurs when short-sellers, who have bet against the stock, are forced to buy shares to cover their positions, further driving up the price.
The options market is also reflecting bullish sentiment. Options volume is significantly higher than usual, indicating traders are placing bets on a sustained rebound in Celsius’ share price.
Despite the recent surge, it’s worth noting that Celsius has been facing headwinds in recent months. The company has seen its market share decline due to softening demand for its energy drinks, which has led to a significant sell-off in the stock.
Last month, Celsius’ stock took a further hit after it announced that distribution partner PepsiCo was scaling back orders by $100 million to adjust its inventory. Following the company’s second-quarter earnings report in August, several analysts lowered their price targets on CELH, citing concerns over the company’s declining sales growth.
BofA Securities analyst Jonathan Keypour even downgraded Celsius last week, citing a sharp drop in sales and projecting that a meaningful recovery might not happen until mid-2025.
Despite these challenges, Celsius is expected to report its third-quarter earnings in early November. Analysts are currently forecasting earnings per share of 5 cents and revenue of $273.751 million.
The recent surge in Celsius stock price will likely be closely watched as investors assess the company’s ability to navigate its current challenges and regain its momentum.
