Chart of the Week: Ciena
Hey, good morning everybody. It’s time for our chart of the week for November 26. And we’re gonna take a look at old-line tech name Ciena; CIEN is the symbol. Let’s take a look at this chart. The stock made a huge run late fall here, and it’s starting to pick up the pace after a little bit of a pullback.
One thing you’ll notice about this chart is the propensity for this stock to be in overbought territory for a long period of time. Now some people would tell you that once it reached that overbought level of 70 on the RSI, it was time to get rid of it, time to sell it, wait for the pullback. But it got a couple of those minor pullbacks in October and early part of November that we call low-risk entry points.
The stock gapped up in September after earnings, and it’s just been on fire for months and months and months. You don’t fight a trend, right? You find an uptrend like this and you just buy it on the dips.
Now, this last dip was a little bit steeper and further than it had experienced before. We pulled back to this 50 day moving average, and we bounced right off of it. And then Monday the 24th of November, the stock had a huge day on big volume.
I like this stock to make a move right back up to the old highs and probably right through up towards $250, maybe in the middle of January, February.
So I do like this stock. This pullback is ideal here for you to get back in – it pulled back about 20% roughly – and again, had a fierce rally here. And if it follows through to the upside, it’s good to go.
It may just go sideways for a little bit longer, but I think that the momentum is here in this stock after this huge run here. I mean, some people had to take some profits, right? So they took some profits over here. It had some moderate volume to the downside. But now it appears that the selling is over once it tagged that 50 day moving average last week.
All right? That’s Ciena. Thanks so much for watching everyone.
Don’t miss a single one of Bob’s charts! Get the Chart of the Week in your inbox every week!
