Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (32930)	6/20/2001 11:52:53 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69786

10:22 ET ****** Ciena (CIEN) 36.14 -0.66: It's no secret that sentiment has gotten extremely negative on this maker of optical networking equipment. Following a string of downgrades and cuts to earnings estimates, Merrill Lynch piled on with a downgrade of it's own this morning. The firm has cut CIEN to a near-term Neutral from Accumulate and trimmed its fiscal year 2002 estimate to 90 cents per share. While Merrill Lynch acknowledges the strength of CIEN's product line, it doubts market share gains will be enough to offset a shrinking market. Still managing to walk that very fine line, Merrill Lynch reiterated its long-term Buy on the shares. On May 17, Briefing.com was cautious on CIEN with the shares priced around 58. Now that the shares have been crushed for a 36% one-month loss we believe CIEN represents an attractive opportunity for those traders with a very short-term time horizon. Using Merrill's 90 cent 2002 EPS estimate, CIEN now trades at a forward P/E of 40x which reduces the prospects of getting cut in half overnight. The shares are trading near their April 4 lows which makes a buy at current levels both high risk and high reward. Nonetheless, CIEN is down roughly 25 points off the high of this current leg down. Current support at 35 represents the first significant level of support since it broke under congestion around 50. Placing a relatively tight stop at 34, CIEN could have upside to 44.50 if near-term sentiment on the issue should turn. Please note, that stop at 34 is extremely important as a substantial break under 35 leaves room for sizeable downside from that point. -- Michael Ashbaugh, Briefing.com