Lumentum (LITE) Approaches A Key Level Yet Again, But What’s Next?
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Lumentum Holdings, Inc. engages in the provision of optical and photonic products. It operates through the Optical Communications (OpComms) and Commercial Lasers segments. The OpComms segment includes a range of components, modules, and subsystems to support customers including carrier networks of access, metro, long-haul, and submarine applications. The Commercial Lasers segment focuses on serving customers in markets and applications such as sheet metal processing, general manufacturing, biotechnology, graphics and imaging, remote sensing, and precision machining such as drilling in printed circuit boards, wafer singulation, glass cutting, and solar cell scribing.
Take a look at the 1-year chart of Lumentum (LITE) below with the added notations:
Chart of LITE provided by TradingView
Over the course of the four months, LITE has formed an important level to watch at the $75 (blue) mark, as that level has provided both support and resistance on multiple occasions. The stock tested $75 yesterday, and a break above it should lead to higher prices for LITE.
The Tale of the Tape: LITE has a key level at $75. A trader could enter a long position on a break above that level with a stop placed below it. However, if traders are bearish on the stock, a short trade could be made on another test of $75 as resistance.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key…
Good luck!
Christian Tharp, CMT
