Ciena (CIEN) was upgraded today by TheStreet's quantitative service. I keep track of the upgrades and downgrades to see if they are about a stock I have written about or a stock that is worth covering. This is not dissimilar from looking at stocks that are upgraded (or downgraded) based on the fundamentals.
Technical analysis is a tool that can complement other investment approaches. Results matter and a combination of tools can give you greater confidence when you do in fact "pull the trigger."
In this daily bar chart of CIEN, above, we can see prices have trended higher the past 12 months, but we see corrections/pullbacks have taken place, too. Prices are above the rising 50-day and 200-day moving average lines. There are a number of upside and downside price gaps with volume surges. Now look at the daily On-Balance-Volume (OBV) line in the middle panel. The OBV line declined from September to April. The line has improved a little since April. On balance, I would say the weak OBV line was a very bearish indicator, but you also have to look at the weekly chart. In the lower panel is the daily Moving Average Convergence Divergence (MACD) oscillator, which has recently turned down to a fresh sell signal.
In this weekly chart of CIEN, above, we can see prices are above the rising 40-week moving average line. The weekly OBV line is positive and the MACD oscillator just turned up to a fresh go-long signal.
In this Point and Figure chart of CIEN, above, we can see prices have come up to the $27 level three times. Prices are poised for an upside breakout, but it hasn't happened just yet. A decline to $24 would give us a down column on this chart.
Bottom line: Traders could go long CIEN on strength above $27 and $28 and then risk a close below $25.