Why optical stocks Lumentum and Coherent were the day’s biggest S&P 500 gainers
The emergence of optical component-related stocks Lumentum and Coherent as top gainers in the S&P 500 demonstrates that investors continue to search for signs of demand along the AI data center supply chain amid concerns over a slowdown in spending.
A buy may be considered given the recent 7-day steady candle flow and market interest in AI data center supply chain demand. Currently, the price is between the support and resistance lines shown; short-term upward momentum could lead to a test of the resistance line, but caution is required due to low trading volume.
At the current stock price level, if short-term upward momentum leads to a test of the resistance level at $1026.76, we will consider taking profit; conversely, if the stock breaks down and shows signs of breaching the support level at $784.47, we will respond with a stop-loss.
RSI(14) is at 45.5, indicating a neutral phase, and the moving averages are in a positive alignment. Trading volume is relatively low at 0.69 times the 20-day average, and the 7-day change recorded -1.0%.
Although a projected return of 1.5% was anticipated, the actual result recorded a 14.1% increase, resulting in an OVERHIT rating. At the time of entry, we judged that caution was warranted due to a neutral RSI(14) of 45.5, a bullish moving average alignment (bullish fanout), and a relatively low trading volume at 0.69 times the 20-day average; however, the market's strong momentum regarding AI data center supply chain demand pushed past the resistance level and led to a sharp actual price surge. Despite the low volume, we failed to fully account for how the increasing trend in thematic news and expectations of supply chain benefits would drive stronger-than-expected buying pressure.
In this trade, we approached the market conservatively because trading volume fell short of the 20-day average, causing us to miss a portion of the upward move. Moving forward, in phases where theme-related news trends are on the rise and supported by S-Class conversion rates, rather than simply being wary of low figures when interpreting volume indicators near resistance levels, we will more flexibly evaluate the overall supply-demand strength of the theme and the ripple effect of supply chain-related positive news, and apply this to the next trade by adjusting the profit-taking target price more dynamically.