Custom Truck One Source Soars 11.5% – Wall Street’s Bullish Shift Sparks Volatility

• CTOS shares surged 11.5% to $5.75, hitting an intraday high of $5.93
• Stifel upgraded CTOS to 'Buy' with a $7.00 price target citing improving T&D rental trends
• 52-week high approaches at $6.11 as volatility index hits extreme levels

A Stifel upgrade and improved equipment availability surveys sent Custom Truck One Source shares soaring to near-record highs, defying sector headwinds. The stock’s 11.5% jump marks its largest single-day move in months, with traders now eyeing critical resistance levels ahead of potential profit-taking.

Stifel’s Survey-Driven Upgrade Drives Momentum
The catalyst was Stifel’s upgrade to Buy alongside a $7.00 price target, fueled by their Q2 equipment availability survey. A net 2% of respondents reported tighter equipment availability versus Q1’s net 14% surplus, signaling stronger rental utilization in T&D markets. TES orders surged 220% YoY to $284M, aligning with full-year revenue guidance. Despite Q1 EPS and revenue misses, Stifel emphasized strategic fleet investments and tariff mitigation efforts as growth catalysts, overpowering near-term headwinds to spark aggressive buying.

Bullish Technicals and High-Impact Options to Watch
• 30D MA: $4.83 (current price +19%) • RSI: 64.5 (neutral-bullish)
• Bollinger Bands: Above upper band ($5.31) signals breakout momentum
• MACD: 0.156 vs signal 0.152 – bullish crossover imminent

Bulls target the $6.11 52-week high ($5.75 +6.3%) with support at $5.42. The CTOS20251017C7.5 call option ($7.5 strike) offers 57% leverage with delta 0.158 and gamma 0.180, ideal for directional bets. Turnover of 220 units shows liquidity. For aggressive plays, the CTOS20260116C7.5 (delta 0.347, gamma 0.155) provides 12.7x returns if CTOS breaches $7.00. Both contracts benefit from theta decay (-$0.002/day) and high implied volatility (45.99%-58.65%).

Bearish traders should avoid with RSI still in expansion mode. Bulls may scale into dips below $5.50 while maintaining stops above $5.30.

Backtest Custom Truck One Stock Performance
The backtest of CTOS's performance after a 12% intraday surge shows mixed results. While the 3-day win rate is high at 46.82%, the 10-day win rate is slightly lower at 48.61%, and the 30-day win rate is 47.96%. However, the average returns over these periods are negative, with a -0.10% return over 3 days, a 0.03% return over 10 days, and a 0.14% return over 30 days. The maximum return during the backtest period was 0.25%, which occurred on day 18, indicating that while there is potential for gains, the overall performance is lackluster.

Bulls Target $6.11 – Watch Sector Leader URI’s Technicals
CTOS’s surge faces critical resistance at its November 2024 peak of $6.11, where 200-day MA ($4.55) and Stifel’s $7.00 target create asymmetric upside. While sector leader URI (-0.55%) languishes, CTOS’s options activity suggests momentum could extend. Traders should monitor Stifel’s next T&D survey releases and $5.42 support levels. For now, the bullish narrative holds – but a close below $5.30 would signal profit-taking exhaustion. Action Alert: Buy the CTOS20251017C7.5 calls if $5.93 resistance holds by Friday’s close.