Celestica Plummets 5.75% Amid Volatile Session: What's Fueling the Selloff?

Summary
• Celestica (CLS) reports Q2 2025 revenue of $2.89B, up 21% YoY, with raised 2025 guidance to $11.55B
• Intraday price drops 5.75% to $246.04, trading below 52W high of $270.15
• Options chain shows high implied volatility (77.25–85.39%) and leveraged put/call activity

Celestica’s sharp intraday selloff defies its strong Q2 earnings and guidance upgrade. The stock trades at a 9.5% discount to its 52W high, with technical indicators showing mixed signals. Sector peers like Cisco (CSCO) rally 1.47%, highlighting CLS’s divergence. Traders are now parsing options data and technical levels to gauge the depth of this correction.

Profit-Taking After Strong Earnings?
Celestica’s 5.75% intraday drop follows a 21% YoY revenue surge and raised 2025 guidance. The move coincides with elevated put-call open interest (96 contracts for 235-strike puts vs. 10 calls) and implied volatility spiking to 77.25–85.39%. While the company’s Q2 results exceeded expectations, the market may be pricing in profit-taking after a 164.88% YTD rally. Technical indicators like the RSI (51.59) and MACD histogram (-0.82) suggest short-term exhaustion, with the stock trading below its 30D SMA (244.13).

Communication Equipment Sector Mixed as Celestica Diverges from CSCO's Rally
The Communication Equipment sector (S&P 500) shows mixed momentum, with Cisco Systems (CSCO) rising 1.47% on 5G infrastructure demand. Celestica’s 5.75% drop contrasts sharply with CSCO’s rally, indicating sector-specific factors. CLS’s selloff appears driven by technical profit-taking rather than broader sector weakness, as its AI infrastructure plays (e.g., 1.6TbE switches) remain structurally bullish.

Options and ETF Plays: Navigating Volatility with Precision
• 200D SMA: $142.82 (far below) • RSI: 51.59 (neutral) • MACD: 7.08 (bullish) • Bollinger Bands: 232.74–264.21 (current price at 246.04, near lower band)

Key levels to watch: 240 (30D SMA), 232.74 (lower Bollinger), and 264.21 (upper Bollinger). Short-term volatility favors options with high gamma and theta. Two top options:

• CLS20251017P240 (Put): Strike $240, Expiry 10/17, IV 85.39%, Leverage 45.84%, Delta -0.346, Theta -0.0977, Gamma 0.0167, Turnover 447,550
- IV at 85.39% (high) suggests strong bearish sentiment
- Leverage ratio of 45.84% amplifies downside potential
- Put payoff at 5% downside (ST=233.74): $6.26 per contract
- High gamma (0.0167) ensures sensitivity to price swings

• CLS20251017C252.5 (Call): Strike $252.5, Expiry 10/17, IV 73.37%, Leverage 45.25%, Delta 0.415, Theta -1.91, Gamma 0.0205, Turnover 169,707
- Delta of 0.415 balances directional risk/reward
- Theta of -1.91 indicates rapid time decay, favoring quick moves
- Call payoff at 5% downside (ST=233.74): $0 (out of money)
- High gamma (0.0205) for aggressive price swings

Aggressive bulls may consider CLS20251017C252.5 if the stock rebounds above 252.5, while CLS20251017P240 offers bearish exposure if the breakdown below 240 accelerates.

Backtest Celestica Stock Performance
I attempted to:1. Pull Celestica’s full-period daily OHLC data (2022-01-01 → 2025-10-14).2. Identify every trading day whose close fell ≥ 6 % versus the prior close.3. Pass that event list to the Event Back-test engine.The Event Back-test engine returned an internal error because the event list it received was empty. That means – based on the price series we retrieved – Celestica has not experienced even one daily drop of 6 % or more during 2022-01-01 → 2025-10-14.Because no qualifying events exist, the requested back-test cannot be run for the “-6 % intraday plunge” condition.How would you like to proceed?A. Relax the condition (for example −4 % or −5 %). B. Use close-to-close moves instead of intraday lows. C. Change the look-back window. D. Abort the task.Let me know your preference and I’ll run the revised analysis immediately.

Bullish Long-Term Outlook Clouded by Short-Term Volatility: Key Levels to Watch
Celestica’s 5.75% intraday drop reflects short-term profit-taking after a 164.88% YTD rally, but its 21% YoY revenue growth and AI infrastructure plays remain structurally bullish. Traders should monitor the 240 support level and 264.21 resistance. The sector leader, Cisco (CSCO, +1.47%), suggests broader market optimism, but CLS’s divergence highlights idiosyncratic risks. Watch for a breakdown below 232.74 (lower Bollinger) or a rebound above 264.21 to confirm the next directional move.