CIENA CORP (NYSE:CIEN) Shows Strong Technical and Fundamental Momentum

The "High Growth Momentum + Trend Template" screen joins Mark Minervini's strict technical rules with fundamental growth measures to find stocks set for possible strong performance. This methodical process first uses Minervini's Trend Template to confirm a stock is in a definite technical uptrend, then adds a High Growth Momentum (HGM) rating to check the company's core business is showing the type of quickening earnings and sales growth that often comes before large price gains. By joining technical health with fundamental speed, the method tries to find leaders early in their growth periods.

Technical Strength: Following the Trend Template

CIENA CORP (NYSE:CIEN) shows a strong technical position that matches the main points of the Minervini Trend Template. This template is made to sort for stocks in a clear stage 2 uptrend, a time where the largest price moves often happen.

A detailed view of the moving averages, a key part of the template, shows a positive arrangement:

• The present price of $178.26 trades well above the rising 150-day SMA ($112.81) and 200-day SMA ($102.10).
• The 50-day SMA ($168.95) is located above both the 150-day and 200-day SMAs.
• All three main moving averages (50, 150, and 200-day) are in definite uptrends.

This arrangement points to continued buying interest across different time periods and is a main filter in the Trend Template to bypass stocks stuck in resting or falling stages. Also, CIEN's price activity shows it is now trading 262% above its 52-week low of $49.21, easily passing the template's rule of being at least 30% above the low. While the stock has moved down from its 52-week high of $214.17, it stays inside the planned area that Minervini prefers, as stocks close to their highs often have the speed to keep leading. With a ChartMill Relative Strength rating of 98.1, CIEN is doing better than almost every other stock in the market, a key trait of real market leaders.

Fundamental Momentum: The Driver for Growth

Beyond a good chart, the Minervini method puts great focus on a company's fundamental condition, looking for proof of quickening growth that can work as a reason for more price gains. CIEN's latest financial reports give solid proof of this speed.

The company's earnings results have been especially good:

• The latest quarter displayed a large 91.4% year-over-year rise in EPS.
• This comes after a 55.6% growth rate in the quarter before, showing a good increase in speed.
• Analysts are paying attention, with the average EPS guess for next year being changed upward by 10.3% over the past three months.

Sales growth is the other key part, and CIEN also performs well:

• Revenue for the last quarter grew 29.4% compared to the same quarter last year.
• This shows a clear increase in speed from the 23.6% growth reported in the previous quarter.
• Revenue guesses for the next year have also been changed upward by 2.8%.

This pairing of large earnings speed increase and strong sales growth is exactly what the High Growth Momentum rating is made to find. It shows that the company is not just growing, but that the rate of growth is getting faster, a situation that often draws big investment and can support continued upward moves.

Putting It All Together: A Unified Investment Idea

For investors using the Minervini method, CIEN shows a strong case. The stock fits the strict technical rules of the Trend Template, confirming it is in a stage 2 rise with high relative strength. At the same time, its fundamental picture shows the type of earnings and sales speed increase that Minervini finds as a shared feature in top-performing stocks. The upward changes in analyst guesses further support the idea, pointing to growing belief in the company's future.

Technical Health Summary

According to the detailed ChartMill technical report, CIEN gets a good technical rating of 8 out of 10. The report mentions a steady overall performance and a positive long-term direction, though it points out some recent ups and downs and price softness that has resulted in a more mixed short-term direction. While the stock's very good technical base is clear, the report indicates the present setup quality is only average, suggesting investors look for a time of settling for a better entry point. Main support is found in the $176 - $178 area.

Find Other Possible Leaders

The "High Growth Momentum + Trend Template" screen is a useful tool for finding stocks that mix technical skill with fundamental speed increase. CIEN is one such candidate found by this process. For investors looking for a selected list of other companies that meet these strict rules, you can see the full screen results here: View the Full Screen Results.

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Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. The analysis reflects the application of a specific screening methodology and should not be interpreted as a recommendation to buy or sell any security. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions. Please read our full disclaimer and terms of use for more details.