Analyst: "Smackdown," "Raw" Powering WWE Rally

WWE has reclaimed its year-to-date breakeven level

The shares of World Wrestling Entertainment, Inc. (NYSE:WWE) are up 3% in early trading at $76.99, after receiving an upgrade from Benchmark to "buy" from "hold." The analyst in coverage waxed optimistic about the re-launch of "Raw" and "Smackdown," as well as engagement metrics and a pullback in the shares that "created an opportunistic entry point." The bull noteovershadows a price-target cut to $95 from $101 at J.P. Morgan Securities.

World Wrestling stock gapped 8.7% higher yesterday after a second-quarter earnings beat. That breakout comes after WWE breached the $69 level and traded at its 2019 lows. Now, the shares have reclaimed their year-to-date breakeven point, but also toppled their 50-day moving average for the first time since late April.

The equity is ripe for a short squeeze, too. Short interest increased by 7.2% in the most recent reporting period to a record high 38.65 million shares. This accounts for a hefty 24% of WWE's total available float, and nearly eight days' worth of pent-up buying power, at the stock's average pace of trading.

Considering this, now might be the perfect time to speculate on the equity's next move higher with options. Currently, WWE's Schaeffer's Volatility Index (SVI) of 35% stands higher than just 13% of all other readings from the past year. This suggests that options traders are pricing in relatively low volatility expectations.