CIENA CORP (NYSE:CIEN) Screens as High-Growth Momentum Leader with Strong Technicals

CIENA CORP (NYSE:CIEN) has recently appeared through a screening method that joins Mark Minervini's strict Trend Template with a High Growth Momentum (HGM) filter. This two-part process looks for companies that are in strong technical uptrends and also have a fundamental speed-up in earnings and sales that frequently comes before major price gains. The method concentrates on stocks showing better relative strength, controlled risk management rules, and high growth possibility, intending to find leaders early in their large price moves.

Technical Strength and the Trend Template

The Minervini Trend Template gives a structured way to find stocks in a confirmed stage 2 uptrend, and CIEN currently meets its main technical requirements. This is important because the method states that the largest stock market winners come from set uptrends, not from resting patterns or downtrends. The template's moving average setup guarantees agreement across different timeframes, confirming continued institutional buying and momentum.

• Price Above Key Moving Averages: CIEN's current price of $169.71 trades well above its rising 50-day ($128.73), 150-day ($93.16), and 200-day ($90.24) simple moving averages. This ordered and rising setup is a sign of a good long-term trend.
• Moving Average Alignment: The 50-day SMA is above both the 150-day and 200-day SMAs, while the 150-day SMA is above the 200-day SMA. This positive alignment confirms that short-term, intermediate-term, and long-term momentum are all moving upward together.
• Proximity to Highs: The stock is trading within 5% of its 52-week high of $177.79, showing strong momentum and no major overhead resistance. At the same time, the price is over 240% above its 52-week low of $49.21, showing a strong recovery and trend.
• Superior Relative Strength: With a ChartMill Relative Strength (CRS) score of 97.29, CIEN is doing better than nearly 98% of the entire stock market. Minervini points out that real market leaders show strong relative strength, often reaching new highs before the wider market indices.

High Growth Momentum Fundamentals

Beyond a clean chart, the Minervini method requires strong fundamental speed-up to serve as a catalyst for more price growth. The High Growth Momentum rating assesses a company's earnings and sales path, and CIEN shows several notable metrics that indicate it is in a period of sped-up growth.

• Earnings Acceleration: The most recent quarterly EPS grew by 91.43% year-over-year, a large speed-up from the previous quarter's growth of 55.56%. This jump is a main feature Minervini searches for, as "big earnings attract big attention" from institutional investors.
• Sales Momentum: Quarterly revenue growth has sped up greatly to 29.40%, up from 23.61% in the prior quarter. This re-acceleration in top-line growth is a strong fundamental catalyst.
• Positive Estimate Revisions: Analysts have raised their EPS estimates for the next fiscal year by 10.36% over the last three months. Upward revisions are a solid sign that the fundamental view is getting better, often resulting in more multiple expansion.
• Strong Free Cash Flow: The company's free cash flow per share has grown by over 506% in the trailing twelve months, indicating good financial health and the chance for future investments or shareholder returns.

Technical Analysis Overview

The independent technical report from ChartMill gives CIEN a perfect technical rating of 10 out of 10, reflecting outstanding technical condition. The report states that both the long-term and short-term trends are positive, and the stock is trading near its 52-week high with better relative strength against its industry peers. However, the setup quality rating is currently a 5, suggesting that while the stock is technically in good shape, it may be overstretched in the short term and could gain from a period of consolidation to present a more favorable, lower-risk entry point. The main support level to monitor is found at $101.80, coming from a trend line on the daily chart.

View the full technical report for CIEN here.

Finding Similar Opportunities

CIENA CORP is an example of the kind of high-growth, technically sound stock that the combined Minervini and HGM screen is made to find. For investors looking to find similar candidates that meet these strict technical and fundamental requirements, this predefined screen provides a good beginning point for more research.

You can find more stocks that fit this High Growth Momentum and Trend Template profile by using this screening tool.

Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice of any kind. The analysis and screens mentioned are not a recommendation to buy or sell any security. Investing in stocks involves risk, including the potential loss of principal. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.