Back in late September, this strategist began an article on JNPR stock with the quote “Sometimes an old dog can learn new tricks — and really good ones at that.” Just like then, a long call strategy could make things “twice as nice” for those bullish on Juniper Networks, Inc. (JNPR).
Juniper Networks who? That’s what my editors said, well, kind of.
Indeed, just shy of a $9 billion market cap and with an average volume north of 5.4 million shares, Juniper isn’t your typical “trending now” fare.
All I can say is that’s too bad for the throngs of investors whose eyeballs will apparently glaze over and look past the opportunity in JNPR.
In our unobstructed view, an attractive valuation suggesting limited downside and downside limited by Juniper Networks’ eye-catching price chart could mean investors have a second chance or “twice as nice” trade on their hands as Juniper stock looks poised for higher levels.
JNPR Stock Weekly Chart
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Support from JNPR’s up-channel line, a three-year cycle 50% to 62% retracement zone and confirmed higher low double-bottom pattern point toward a potential multiple expansion from Juniper’s current and below-market valuation.
As an initial upside price target for Juniper stock, $25 to $26.25 maintains a bit of zone resistance consisting of two earnings-related gap fills and the longer-term 200-day simple moving average.
Juniper Stock Long Call Strategy
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Looking over Juniper’s options, the October $25 call currently priced at 90 cents is attractive. On an expiration basis, Juniper would need to rally from $23.10 to $25.90, or 12%, and into our initial resistance zone for this bullish trader to breakeven.
The good news is there’s 150 days on the calendar and sufficient time for JNPR stock to begin moving higher. Also, as this long call maintains reduced time decay and volatility risks; any interim movement in the form of a rally will assist the trader towards much quicker profitability.
Investment accounts under Christopher Tyler’s management do not currently own positions in any of the securities or their derivatives mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT.
