Disclaimer: VFC has no affiliation with Celsius Holdings or with any third parties associated with the companies. VFC drinks Celsius, tho, and love every flavor except for Strawberries and Cream. VFC has received no compensation for this blog post, although there may be an advertisement or two at various locations on this blog. VFC does not offer advice or investment services and nothing you read here should be construed as such. VFC is just a guy with an opinion and access to a computer and a keyboard; bringing discussion and ideas to the table. #AhYeah.
Aside from keeping an eye on shares of Cel-Sci (CVM) this week (see previous blog post), shares of Celsius Holdings (CELH) will be worth watching, too. Last week we discussed how significant growth in the Celsius distribution network will likely have a very positive impact on earnings over the next couple of quarters and the investing community picked up the indicators, as well, as volume started rolling in and a new 52-week high was set at $5.37. Not bad, considering shares were trading for under four bucks just a couple of months ago.
Although last week was a pretty solid week, shares retreated from the high back down to close Friday at $5.04. It was a show of strength for the stock to bust through five - seems to be quite a bit of resistance at that level - but any potential run higher may need some more momentum, based on Friday's pullback when short term momentum traders probably cashed out their profits.
There is still an eight percent short interest in CELH, not too heavy, but any covering done leading into the next earnings release could help propel shares higher. As discussed in my previous post, earnings have been on the upswing, setting a record last year, as the calorie-burning 'healthy energy' drink picks up steam in many outlets, including target, CVS, and the various military exchanges (Navy Exchange, Army and Airforce Exchange, etc.).
A long term follower of the Celsius stock also pointed out last week on the chart that the long term downtrend may be in for a reversal. The recent trading action would support that claim.
This week, we'll need to see a continuation of the recent strength. While volume has increased to near-respectable levels, evidence of real investor interest will be supported by a further increase in volume, which should be followed by price. The next earnings report due on 8 August, giving investors 8 trading days to take or build on positions leading in to what could be an encouraging report, based on recent press releases announcing distribution growth.
The energy drink and 'healthy energy' sectors are highly competitive, but Celsius looks to be gaining traction and is starting to pop up alongside some of the big boys of the sector in many distributors. With a pending earnings release accompanying increases in both volume and price, it'll be worth watching Celsius Holdings again.
VFC is long CELH.