Cleveland-based CBIZ Inc. (NYSE: CBZ) offers its services to companies that prefer to outsource some services such as tax preparation, insurance and benefits administration, and IT consulting. The stock has been a strong momentum name in recent months, steadily rising 37% higher since early August. During this monster uptrend, the stock has successfully held the support of its 10-day and 20-day moving averages.

Last Friday (11/16), CBZ overcame its May 2006 peak to topple double-top resistance and hit its highest level since December 1999. Indeed, the shares haven't traded out of single-digit territory since last millennium, but the time could be nigh. In fact, the 10 threshold is less than 10% away.



CBZ continues to make its way higher against a wall of worry (or at least skepticism) that supports the shares. Signs of bearishness or caution are good from a contrarian perspective, as they suggest buying power that could be on the sidelines waiting to further the bullish cause. For one, although CBZ is an optionable stock, the speculative crowd hasn't stepped up to the plate. In fact, in the December and January series combined, there are 754 open call contracts and 162 open put contracts. In other words, an entire investing contingent is neglecting CBZ in spite of its strong price action.

Meanwhile, short interest accounts for more than 8% of CBIZ Inc.'s float, or the number of shares available for public trading. At the stock's current average daily volume, it would take more than 13.5 days to dump all of these shorted bets. With the stock still in rally mode and hitting new historical highs, a move toward short covering could be right around the corner, ready to rally the shares above that pesky $10 mark.

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Beth Gaston Moon is an analyst at Schaeffer's Investment Research.