Ciena Upside Looming?

Published on Thursday, 09 September 2010 01:51 Written by TradersHuddle Staff

New York, September 9th (TradersHuddle.com) - Shares of Ciena Corporation (NASDAQ:CIEN) ended the trading session higher by $0.69 or 5.14% from its previous close. Ciena's price action formed what is considered to be a bullish engulfing candle that could very well signal continuation of trend or reversal on ongoing weakness.

Ciena Corporation (NASDAQ:CIEN) develops and markets communications network platforms. The company offers broadband access, data and optical networking platforms, software tools, and global network services support worldwide telecom and cable/MSO services providers.

Ciena's recent stock range has been formed by a trough where calculated support was defined at $12.365 and by a peak that established the resistance level at $13.12, which could be used by traders planning their trades.

Traders wanting to establish a position in Ciena or traders that are already holding the stock can use the bullish engulfing pattern to their advantage. The pattern provides a defined risk as it shows where the bears were able to push the stock down, before the bulls stepped in.

The bullish engulfing pattern is a leading indicator that provides an alert to the bulls that the trend will continue or that there is an immediate reversal to the short term weakness seen on the stock. Below an Engulfing Bullish Candle Illustration: