Points On Ciena
Any day of the week, you may see an intriguing pattern set up in a stock
and wonder whether it’s just noise or whether it’s going to produce a tradable
move.
As important as this, many traders are unaware of how easy it can be to get
a handle on the significance of a pattern on a daily chart by looking at a
weekly or monthly chart. Here’s one excellent example.
On a daily chart, Ciena
(
CIEN |
Quote |
Chart |
News |
PowerRating) appears to be bouncing higher from the
lows of a nine-month range. But a much more important pattern emerges if you
take a look at a weekly chart.
Here you can see the scope of patterns
that stretch out
over a three-year period. CIEN is bouncing from a 14-month trendline, the
lows of the range I mentioned already, and its 50% retracement (Oct. 1998 lows
– Oct. 2000 highs).Â
This throws some weight to the argument that the
earnings-driven (17-cent gain vs. analyst estimates of 15-cent) 12-point gain
we saw in CIEN Thursday is significant and potentially sustainable.
Until Friday,