Celestica Crumbles Amid Sector Woes as 133rd-Largest Volume Stocks See Options Gamble on Volatility and History Hints at Comeback

Celestica (CLS) closed at $174.975 on August 20, 2025, marking a 0.99% decline from its previous session. The stock traded within an intraday range of $173.23 to $183.125, with a daily trading volume of $680 million, ranking 133rd in the market. The move followed broader sector pressures in the Electronic Equipment industry, where Flex (FLEX) also posted a 3.69% drop, signaling heightened macroeconomic and regulatory uncertainties.

The selloff in Celestica was attributed to sector-wide concerns rather than company-specific developments. Analysts noted conflicting signals impacting the sector, including mixed growth forecasts for semiconductors and regulatory risks tied to potential U.S. government involvement in Intel. Despite a dynamic price-to-earnings ratio of 33.87, the stock’s sharp decline drew attention to near-term margin pressures and execution risks. Technical indicators such as an oversold RSI of 37.57 and Bollinger Bands near the lower bound ($165.80) further underscored short-term bearish momentum.

Options traders have positioned for volatility, with put options offering leverage against potential downside. The CLS20250829P170 and CLS20250829P175 contracts, both expiring August 29, showed strong liquidity and gamma sensitivity, reflecting investor caution. A breakdown below $170 could trigger further short-side opportunities, while a rebound above $175 may attract bullish positions. Long-term buyers remain cautious, with the 200-day moving average at $114.86 far below current levels.

Historical backtesting of Celestica’s performance following a 5% intraday plunge showed a 57.17% win rate over three days, 60.35% over ten days, and 69.03% over 30 days. The maximum return during the test period reached 18.94%, suggesting potential for recovery and outperformance post-correction.

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day from 2022 to 2025 delivered a 1-day return of 0.98% and a total return of 31.52% over 365 days. This indicates the strategy captured some short-term momentum but also reflected market volatility and potential timing risks.