CIEN
is looking for gap fill. Beat Q3 ER but COVID guidance tanked the price. Comparing to $CSCO who MISSED ($0.51 vs $0.70 EPS) their last ER Nov. 12 but gapped up.
$CIEN may gap up for similar reasons if the market sentiment is bullish around the ER.
Reminds me of $FSLY chart which is also looking to fill the gap.
The day of the ER seems to coincide with when NDX had the Sept 2020 correction, so this name seems to have been unfairly punished.
$CIEN has stronger relative strength vs NDX, so once we start filling the gap with higher relative volume, the price action may be faster than normal $1.21 ATR
Market is melting up and $CSCO popping on ER miss could be a preview of what will happen to this name.
Lowered expectation and over reaction on the pull back may help this name to pop.
Play - Bullish
Looking for consolidation and to cool off oversold RSI on Daily and 4Hr for the breakout into the gap.
Selling Credit put spread leading up to the ER for IV crush.
Dec. 18, 2020
$43-$41 credit put spread (currently 0.44 Cr for $200 margin)
Following ER, go long if reaction is positive and above $47.05
Jan 15, 2021 Call $47 (currently most liquid)
PT: $50, $55, $58
Company Profile
$CIEN is a challenger to $CSCO
Ciena Corp is a network strategy and technology company. It provides network hardware, software, and services thatsupport the transport, switching, aggregation, service delivery
and management of video, data, and voice traffic on communications networks
The sectoris outperforming the market thus farin 2020, with a gain of 20.9%. It also
outperformed in 2019, with a gain of 48.0%, and in 2018, with a loss of 1.6%.
-Dec 2, 2020
CIEN trades at 14.6-times our FY20 non-GAAP EPS forecast
and at 14.9-times our FY21 estimate.
- Argus Report, Jim Kelleber CFA
Sept 8th, 2020 - BUY