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CTSH Covered Call Analysis: Proceed With Caution Weak · 20/100
CTSH · $57.92 ·
Analysis generated Apr 13, 2026 ·
Data as of market close Apr 13
This strategy is NOT recommended for CTSH right now
Score 20/100. The technical signals do not support selling covered calls on CTSH at this time.
RSI at 36 — oversold, not ideal for selling calls. IV -37% vs avg — premiums below average, less income. ADX at 32 — strong trend, stock may run past strike. TTM Squeeze ON — breakout imminent, risky for capped strategies.
Check back when conditions improve, or consider a different strategy.
Quick Take
CTSH is trading at $57.92 with RSI at 36 (oversold territory). Options IV is at 38% — 37% below its 30-day average of 61%. Neither RSI nor IV strongly favor selling calls right now. Consider waiting for better conditions or using a different strategy.
Technical Signals
RSI (14)
36
IV Today
38.4%
IV vs 30d Avg
-37%
MACD
bullish
ADX
32
MFI
60
The Setup
CTSH Covered Call
LONG STOCK
100 shares @ $57.92
SHORT CALL
$63 Jun '26 · $2.01/sh
Net Cost
$5,591
Max Profit
+$709
Break-even
$55.91
Projected P&L at Target
+$709
(12.7%)
P&L at Expiry
P&L Scenarios
What happens at different CTSH prices by expiry:
| CTSH Price | Today | May 5 | May 27 | Jun 19 (exp) |
|---|---|---|---|---|
| $46 (-20%) | -$968 | -$960 | -$957 | -$957 |
| $49 (-15%) | -$695 | -$678 | -$669 | -$668 |
| $52 (-10%) | -$438 | -$406 | -$383 | -$378 |
| $55 (-5%) | -$205 | -$156 | -$109 | -$89 |
| $57 (-2%) | -$78 | -$19 | +$44 | +$85 |
| $58 (0%) ← now | +$0 | +$66 | +$139 | +$201 |
| $59 (+2%) | +$73 | +$144 | +$228 | +$317 |
| $61 (+5%) | +$172 | +$249 | +$345 | +$491 |
| $63 (+9%) ← target | +$279 | +$360 | +$463 | +$709 |
| $64 (+10%) | +$310 | +$392 | +$495 | +$709 |
| $67 (+15%) | +$417 | +$496 | +$591 | +$709 |
| $70 (+20%) | +$495 | +$567 | +$646 | +$709 |
Why This Strategy, Why Now
- RSI at 36 — oversold, not ideal for selling calls
- IV -37% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 32 — strong trend, stock may run past strike
- TTM Squeeze ON — breakout imminent, risky for capped strategies
Key Risks
CTSH has bullish momentum (MACD). If a positive catalyst emerges (earnings beat, product launch), the stock could gap past your strike. Consider rolling the call up if CTSH approaches the strike before expiry.
ADX at 32 indicates a moderately strong trend. In trending markets, covered calls cap your upside too early. Use a higher strike to leave more room.
TTM Squeeze is ON — a volatility breakout may be imminent. If the breakout is to the upside, your short call will be tested quickly.