The networking stocks have been on fire lately, with many names staging breakouts like RBAK and CIEN while others continue to make new highs like CSCO. CIEN had a major correction from the high in May but looks ready to resume that uptrend. On a weekly basis (above) CIEN has cleared the moving averages and the only resistance ahead apears to be the previous peaks following the May high. These resistance levels at $30.87, $33.67 and $33.34 would provide short term targets for those who want to trade it aggresively. In the same sector RBAK has similarly been fantastic and looks destined to reach its previous high at $25. After these recent moves both CIEN and RBAK may need to rest, but this would provide a good entry opportunity. The ideal entry on both would be their 200 day moving average's (dma) but a close below these levels would be a strong sell signal.
The catylist for last weeks breakout was CIEN's 4Q earnings report in which they showed a profit for the first time in 5 yrs. RBAK's catylist was a contract from a Chinese telecom providor to provide broadband equipment for IPTV on top of the CIEN report, and CSCO buyout rumors. Both companies are benefiting from a worldwide boost to increase bandwidth which is a trend I wouldn't expect to dissapear anytime soon.
On a less bullish note, ENR looks ready to make the next leg lower. After a bounce from the $65 area ENR looks ready to test its 200 dma which I expect to be in the lower 62's when it gets there. There is also some chart support at $62 so this is where I would expect it to bounce next.
Happy holiday trading!