The chart of JDSU is the perfect microcosm for this market. It had already seen a spectacular run since last fall, yet headed into the past two sessions still looking perfectly set up for higher prices. On Friday, we saw the big breakout. However, not only did we see a lack of follow-through today, but all of the gains–and more–have already been given back.
So, is JDSU a high probability long swing trade now? No. Even if it continues higher, the giveback today negates a disciplined swing trader from entering.
Is JDSU a high probability short setup now? Not necessarily. Although the breakout failed, we’d need to see at least some follow-through to the downside.
The same can be said for the market at-large.
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JDSU reaction is perfectly normal:
On Friday and went up as hell and today it had naturally to correct from such a movement, together with the disapointing results of CIEN, which were another catalyst to the correction of JDSU.
Let JDSU go up again.
No. Not normal to give it all back and more.