[Thematics are updated weekly - be certain to check the date above so you’ll know if you’re looking at up to date charts. Free subscribers get these on a delayed basis]
I continue to have an overweighting to the Photonic sector, and I believe there is still a lot of opportunity for dramatic upside, even from these prices. If you have questions about which of these stocks are likely to stop here, pull back or continue, just ask your specific question in Chat (where we chart and discuss individual stocks everyday… Updated to add…starting to show some cracks in the charts but the photonics theme is still 2nd inning IMO…leaders down 20-30%ish tend to be good adds for me
7/4 Wow, we finally got the fireworks we were expecting. Now I want to see if that was enough to be a capitulation bottom (current expectation is for a big gap up Monday). If we RIP higher, we then need to make the decision if it is a gap and go type of move, or a reflective short covering & FOMO bounce, that ultimately leads to new lows. My thoughts for each stock below, however i’ll be taking my time, and be patient overall, as this is still a crowded trade, and likely has more work before any significant moves higher can hold.
7/16 Updated -
So we have the answer to our question….it was a dead cat bounce, and the bottom is still not in. While technical analysis will not tell us IF we are at a bottom, it does give us clues as to where the buyers were at earlier price levels (possible support levels), as well as where we might expect to find sellers (possible resistance) above (bagholders) who just want to get out even.
On my charts I used dashed lines to reflect these levels. Once violated (on a weekly candle close), the door is open to the next dashed line (above or below). When you see bullseyes on my charts, they are not predictions that the price will hit them all….I trade these level to level. Percentage markers on my charts are also not meant to be predictive, they just show how far we are from an ATH, and how far down to various support points.
OPTX (not so much photonics as much Optical connect in data center/Optics in defense/space/med device - new ATH and rejected at top of the channel // Buyer at lower 1/2 of channel, trim at channel top….rinse repeat until channel gets violated
Bearish Harami candle (please see our new teaching indicator for TradingView that helps you to learn various candles and what they are suggesting) at center of channel. While ideally you want to add at successful tests of the bottom of a channel, down 30% here from highs might be an opportunity when we look back latter.
7/16 update - We have lost the earlier channel, and unless/until reclaimed stock should be considered dangerous. Know that often when a stock has lost trend, it will try to reclaim before resuming current trend.
SMTC holding up better than others // 7/4 Update - Here’s what I see when looking at this chart…we had previously been flagging (correcting via time not price), once we lost support (bottom of flag/base) we got a ‘from failed moves come fast moves’ candles -down 12% intraday just like that. When stocks or indexes lose an important trend, they often try to reclaim (This is your opportunity to pair back, rather than selling in the hole if the earlier pain caused you to lose sleep ). At some point we will test that DTL, and it will either continue on it’s path lower, or resume an uptrend. Notice that he last few blue candles prior to the flag starting there was no sideways action (no base). This means the current door to lower prices is open and it is a higher risk to catch this falling knife at this time. Lastly, I want to monitor RSI < MA where dangerous things can happen.
7/16 Update - Most of these (if not all) are falling knives…At the least it MUST close above this current channel to even consider not being dangerous still.
ADTN 1X sales legacy networking co. (think NOK 6 months ago) entering the 800G & 1.6T optical space via a photonics acq they made a while back….10Xer in the making…
7/3 update - notice how unlike the chart above, ADTN does have an earlier multi week base to shoot against. This helps the case that we might be at a durable bottom. We are down 35% from the ATH (where it is sometimes an opportunity when we look back latter) . Lastly we are in a DT till we’re not….needs a close up and out of the channel.
7/16 Update - at the weekly 55MA a possible level to find support, but nothing I would hang my hat on. Until we close up and out of the channel still dangerous
LTPH Optical interconnect (not photonics) space - An AnnualizeThis pick from sub $5 (not currently in my portfolio) Updated rejected at top of channel ….boolish still though. Hoping for a dip buy - $1B market cap off $60M sales going to $400M into 2030 - should re-rate much more still
7/4 update - I drew the shapes on the chart before the last candle fell apart to highlight the possible synergy to the earlier setup, and I added to my position (small) as a result. Fast forward to Friday’s candle and that thesis went out the window. I am now looking for one of two things for my next add…either a trip to bottom of the large blue channel (not my base case), or I need o wait for us to reclaim the DTL above.
7/16 Update - Lost are larger channel, and now dangerous till a close up and above the narrower channel
MXL Flagging at ATH’s (20%-30% drawdowns can be gifts) //Holding up better then most and breaking out of flag
7/4 Update - rejected at channel top, with a confluence of 55MA/channel bottom not to far below, the UTL immediately below might make for a ‘decent’ add…see how price acts when it hits it
7/16 Update almost there (?)
CRDO 7/4 update - Hopefully you are getting more acclimated to being able to decipher these charts without my commentary (that’s my goal). In a bullish (setup) descending wedge, with 55MA/UTL confluence below and an approximate 25% drawdown from ATH’s . Adds are either there, or on a break up and out of wedge
7/16 Update -still dangerous till at least a break up and out of wedge
AXTI - 7/3 People ask me what I have against Serenity, this stock along with AEHR, SIVE and a few others are the poster child for why…dude was pimping the stock all the way up, continued to pump it at ATH’s, and continued to pimp and pump some more all the way down. Unlike us, who have cautioned, provided points of interest on our charts, and suggested (continue to) that stock (now down 60% from ATH) is no touch until a reclaim of the DTL above.
7/16 Update - see earlier comments (nothing new to add)
AEHR - 7/3 update …you guys know the drill by now ya? Puked up a lung the moment we lost the channel…. due for a bounce….none matter until we close over the DTL….
7/16 Update - killer earnings couldn’t save this one….speaks volumes to just how uninvestable the space continues to be
SIVEF (daily chart) 7/3 update - missed my add target by pennies Friday sigh, hopefully it doesn’t get away from me, but has a history of 15-20% gap ups/downs since it is OTC. Will add on a visit to my dashed line/s below, but if I don’t get the opportunity - over the DTL as well (I originally sold 1/2 my stock at 9 only because I couldn’t justify the valuation VS how many lasers they could produce. There latest foundry partner changes that fwiw)
7/16 Update - trying to base (bear flagging)…look for directional break of that current channel for next clues
AMSSY - ***WARNING*** This is the OTC listing and it trades by appointment bid ….So I own this knowing that I can’t sell it for a few years even if I want to….Turnaround story that’s compelling though IMO . Sold off non-core assets to pay down debt and new focus on datacenter photonics…have a hyperscaler partner testing….trades at less than 1 X P/S ….Could rerate 20X
7/16 Update to add I am restricted to owning this, so had to sell, but my conviction in the story remains the same, if anything more so since the former head of photonics for NVDA is now here
AAOI: 233MA tends to be respected more often than not, but we’re potentially looking at a 2nd fugly monthly candle (not shown here), needs to hold here
7/4 update - Have been suggesting that if we lost that blue band, that the UTL below is in play but it might not….we are down 50% from the highs, and fibanachi guys would tell you that’s often a great area for a bottom…we’ll see…next add for me is above the DTL or a visit to that UTL below
7/16 update - unless we wick and reclaim last support by eow, UTL below now in play
POET - I do not want to add back…too much controversy and not happy about yet another capital raise - placeholder position only. //
7/4 update Getting more comfortable with the legitimacy of their story (but not enough to go heavy) and want to add at dashed line below, or a close > DTL
7/16 trying to base (bear flagging)
COHR: 7/4 update - down 25% ….note that earlier base/UTL confluence …suggestive that risk below likely 9% or less from these levels….am hoping I get that opportunity, if not …over the DTL above
7/16 Update - might be trying to hold that earlier base…see how it looks eow…open mind
LITE I still think it’s early for this group and when I look back in 5 years = home runs. They are being forced to replace anything that runs over copper with light. This is a larger megatrend than when we built the railroads, or replaced all the Telco copper with fiber and VOIP.
7/4 update - Same thoughts as COHR
7/16 Update - trying to base (bear flagging)
SOI Consolidating with the group in a flag, …
7/4 update - Interesting to me when we leave a channel/wedge and do not get a responsive move…oh well….the converse of that is that it’s equally interesting that SOI kind of yawned through the rest of the sectors bloodbath…se if we can break next dashed line above
7/16 Update - UTL here needs to hold, also this is another one I was forced to sell for compliance reasons
AIXA 7/4 update - 25% drawdown, still holding parabola. If lost, next dashed line below. First challenge for bulls is a weekly candle close above the body of last candle. Can be dangerous as long as RSI < MA
7/16 in a freefall…. nothing new to add
CLFD 35% drawdown - candle looks like a ‘from failed moves come fast moves’. Still holding UTL and at 21/55 MA confluence.
7/16 Update lost MA’s, lost UTL …
MRVL: 35% drawdown (you know what I think of this by now), can make a case that it is still ok in a flag above UTL - If lost next UTL below. For bulls, you want to close above last candle body high, and then attack top of flag next
7/16 update - 40% drawdown now…
CIEN data network fabric leader…. 7/4 update - bear flaggy looking, but respecting for now…look for break of that flag for directional clue
7/16 Trying to base (bear flagging)
GLW: Specialty glass and optical fiber. TAM $25.89B - Holding up the best in the space 7/4 update 30% drawdown from ATH, holding up better than others, but with a bearish engulfing candle. Bulls 1st challenge is to hold channel - If lost will update in chat
7/16 hopefully these charts are starting to speak for themselves…If not join us in chat where we go into greater detail and answer your questions
TSEM 7/4 update dashed lines bull/bear targets
LWLG - 7/4 update I added too early..no more adds for me until > DTL
7/16 Trying to base (bear flagging)
ALMU - 7/4 update 40% drawdown from ATH’s, has 21/55 Weekly MA confluence, so see if it can hold else next dashed line below..bulls not safe till up and out of channel
7/16 now 50% drawdown…trying to base (bear flagging)
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