Finisar Corporation (NASDAQ: FNSR)

Finisar Corporation provides optical subsystems and components for data communication and telecommunication applications in the United States, Malaysia, China, and internationally. The company’s optical subsystems primarily consist of transmitters, receivers, transceivers, transponders, and active optical cables that provide optical-electrical or optoelectronic interface for interconnecting the electronic equipment used in building communication networks, including the switches, routers, and servers used in wireline networks, as well as the antennas and base stations for wireless networks. It also offers wavelength selective switches that are used to dynamically switch network traffic from one optical fiber to multiple other fibers without converting the optical signal to an electronic signal. The company’s optical components primarily consist of packaged lasers and photo detectors for data communication and telecommunication applications; and passive optical components for telecommunication applications.

To review Finisar’s stock, please take a look at the 1-year chart of FNSR (Finisar Corporation) below with my added notations:

1-year chart of ATW (Finisar Corporation)

Finisar’s stock has been stuck within the same $11 to $17 area for the entire year. However, during that time, FNSR has created a strong resistance at $17 (navy) and the stock has tried to push through that resistance several times. A break through that $17 resistance would be a new 52-week high for the stock and should mean higher prices moving forward.

The Tale of the Tape: FNSR has a 52-week high resistance at $17. A long trade could be entered on a break through that level with a stop placed under it.

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Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT