Oclaro Inc (OCLR) is printing several warning signals as it appears to be topping after a stellar advance. OCLR has nearly quadrupled since the beginning of 2016, but it's difficult to ignore the heavy volume reversal last week - especially when you consider that a negative divergence has been in place on the weekly chart since highs printed in November.
That bearish engulfing candle was accompanied by over 60 million shares, suggesting a near- to intermediate-term top is in place. To the downside, the October low near 7.00 and the rising 50 week SMA at 7.19 - a likely target given the negative divergence - could be the target now for the bears.
Happy trading!
Tom