1LITE trade ideas
LITE Bounces off Support For Trading OpportunityStrong long-term trend.
Careful of the potential for a head and shoulders. Use SL now, but if price rises above $51 can use the ATR Stop indicator as a trailing stop (exit on close below). If using ATR Stop, target is not required.
Seen this same pattern a couple times before.
LITE pulled back to the 44.70 pivot and looks ready to go againLITE is retesting and getting support at 44.70 (this classic pivot from a double bottom base).
It can either be bought right here off support for a quick trade (with a tight stop in case it fails) OR you can wait for it to climb above short term resistance at 48.31 for confirmation.
What I think about this chart:
LITE broke out of a flawed double bottom. Its flawed because the 2nd leg is supposed to undercut the first leg. This helps flush out the weak hands. We didn't get that here but obviously it didn't matter.
After reporting earnings on 2/8 LITE surged and ran over 35% until it started pulling back the last week of February.
It's been pulling back on low volume and is presently retesting the 44.70 pivot as well as the 21ema. Note how tight the price action has been the last several days.
On the weekly chart, last week's retest of the pivot also counted as a support week. LITE closed in the upper half of its trading range on elevated volume. This is a display of weakness being bought.
Finally, check out the RS line particularly on the weekly chart. It continues to break into new highs and is leading the market higher.
For a quick trade with an exit right below support, I think it's worth a shot here.
*LITE is in the telecom group and is joined by our number 1 favorite AAOI
LITE- looks a perfect short from 21.5LIT is forming a head & shoulder. On its break we can see a target of 17.
We are considering to take Aug16- 22.5 put ($0.9)
You can check our detailed analysis on - in the trading room/ Executive summery link here-
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Time Span: 4:40”
Trade Status: waiting for the entry price to meet
