MichaelGLamothe

LITE pulled back to the 44.70 pivot and looks ready to go again

NASDAQ:LITE   LUMENTUM HLDGS INC
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LITE 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
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