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Is It Finally Time for Infinera to Rally?


From the Buzz & Banter: Positive earnings from Ciena tomorrow could boost fellow telecom manufacturer Infinera.

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

Infinera (NASDAQ:INFN) reported earnings way above expectations (not to be confused with "estimates") back on January 29, guided to a very good 2014, but more importantly, stated repeatedly that its visibility in the near and longer term has never been better. The stock jumped 30% the following day only to dribble back lower ever since. To say it has been frustrating is the understatement of the year.

On Thursday morning Ciena (NASDAQ:CIEN) reports its quarter, and in the past, Infinera has reacted to Ciena's numbers, even though Infinera competes with Ciena in only one niche sector. Aside from wishful thinking, I am pointing this out because Infinera's chart is begging for a catalyst to break out from under a crowded area of moving averages and trend lines. Throw in a textbook "island reversal," and above $9, $10 should be a layup.

Click to enlarge

If there hadn't been a nagging amount of non-Rule 10b(5) insider sales, I don't think I could resist adding to my already very large long.

Twitter: @FZucchi
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Position in INFN.
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