Don't Ignore This Chart!

Weekly Candle Argues For Further Weakness Ahead For Oclaro

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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

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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