Lumentum Holdings Inc. (LITE)

Lumentum stock forecast: buy or sell

Lumentum stock outlook

  • Lumentum stock skyrocketed 2.71% to close at $80.63 on the stock market today.
  • Price is drawing a scaled uptrend since mid-March with higher tops and higher bottoms. Up to date, price made a 36.52% profit since the beginning of this rally
  • Lumentum Holdings Inc. manufactures and sells optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa.
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Please read:
The viewpoints published in this article are personal and should not be followed as recommendations for you to buy or sell shares. The author of this paper does not have any knowledge of the individual circumstances of the reader, his or her finances or his or her own best interests at any given time. All users should speak with their financial advisor before buying or selling any securities Comments are published for general educational reasons only

Lumentum stock chart overview

Should I buy Lumentum stock?

Even if you are a experienced or a novel trader, best trading results come from using an investing strategy that never leaves to random or subjective opinions when is the best moment to buy or sell stocks. Trading strategies are meant for helping you in the decision process of what stocks to pick and when is the best moment to buy them. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best

Is LITE stock a buy?

Currently, Lumentum stock doesn't match any of these trading strategies, so our recommendation is not to buy now. This doesn't mean LITE will slide in coming sessions, or it will not rise higher. Simply, it doesn't match our recommended trading systems

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Should I sell Lumentum stock?

When is it time to sell Lumentum?. Similarly to when we have to buy shares, determining when is the best time to sell is not a whimsy decision, and we must use our own trading strategy. When selling, as well as buying, detailed strategies are very simple to follow and are only valid for selling stocks in your porfolio, not for selling short Lumentum stock

A guiding principle is that you should never hold a trading operation that shows a greater losses than those expected upon purchase. When to sell shares always has to be dictated by the stop-loss (automatic or manual)

Is it time to sell Lumentum stock?

Currently, Lumentum stock doesn't match any of our preferred sell setups, so if you hold Lumentum shares and your operation is in profit probably is not time to sell now

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Analysts' recommendations to buy or sell Lumentum stock

Brokerage firms and financial institutions post stock ratings based on their views of the market and the fundamental and technical situation of the analyzed stock. Unfortunately, the accuracy of these predictions is not very high, and certainly not a direct buy or sell signal

In the last 30 days, just one rating was published for Lumentum

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Lumentum ratings

Brokerage firmRating
Jul 2nd, 2020
MKM Partners Neutral

Technical analysis

Lumentum stock started an uptrend in mid-March, and gained an amazing 36.52%. The chart shows higher peaks and higher lows, and along the way gave some buy points for those who wanted to invest. Latest pullback was on June 25, when price bounced at $71.10. Like in all uptrends, price needs to take breath and now price is moving in a range between $85.93 and $71.10

SMAs overview

Moving averages are tools for traders to gauge momentum. A moving average is the average price of a stock over a set period of time. Moving averages are usually calculated on different periods depending on the trading timeframe 21, 50, 100 and 200 days are the most usual moving averages

Supports and resistances

Traders use support and resistance levels to identify price points on a chart that tend to behave as obstacles, containing the price of shares to move in certain direction. A support level is a level where the price tends to find support as it falls. This means that the price is more likely to "bounce off" this level rather than break through it. However, if the price breaks down this level, it is likely to continue descending until finding another support level. On the contrary, resistances are where the price tends to find resistance as it moves up. Likewise, this means that the price is more liable to "rebound" at this level, and if it finally breaches this level, the price will climb more easily until it approaches the next resistance

The current resistances are:

  • R1: $81.20 (0.71% above)
  • R2: $84.49 (4.79% above)
  • R3: $85.14 (5.59% above)
  • The current support levels are:

  • S1: $75.51 (-6.35% below)
  • S2: $74.40 (-7.73% below)
  • S3: $71.10 (-11.82% below)
  • Bollinger bands

    So-called Bollinger bands are a widely known studio designed by John Bollinger. Fundamentally, the Bollinger Bands are lines that run around a moving average and vary the distance from the bottom to the top depending on market volatility. They are usually plotted by an interval of two standard deviations, above and below, from a moving average line. Bollinger himself recommends the moving average period to be 20

    Since the price surpassed the upper band on July 6, the price sliced by 5.74%

    Relative strength index

    The RSI (Relative Strength Index) is an oscillator-type indicator that measures price action to spot when the price of a share or financial asset is oversold or overbought. Oscillator indicators, such as relative strength, are designed to indicate values in the range of 0-100. The relative strength indicator is one of the best known and most widely used indicators, and it was invented by J. Welles Wilder in 1978

    The RSI has been between the levels of 70 and 30 for some weeks, and therefore, without this indicator really helping us to make any decisions.

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    Earnings and financials

    Lumentum Holdings Inc. (LITE) reported adjusted EPS for the fiscal Q1 that significantly beat Wall St. expectations. Quarterly EPS was $1.26 per share instead of $1.05. This quarterly report means an earnings surprise of 20%. On the contrary, reported sales were $402.8 million, aligned with the market forecasts.

    Same quarter last year, reported EPS was $0.91, so current EPS means an improvement of 38.46%. Revenue inched down a -6.95% on an annualized basis in the 1st-quarter, from $432.9M to $402.8M last quarter.

    Lumentum presents financial report on early next August. Wall Street predicts a per-share earnings of %s of $0.82, compared to Q1 that made $1.26. If you hold or you are looking to buy Lumentum shares, you must be on alert as the financial reporting day usually has a higher than usual volatility, and price can soar and sink with exceptionally low liquidity and not respecting your buy/stop-loss orders. You can probably find more details about the earnings conference call and the earnings reports on the Investor Relations section of its website: http://www.lumentum.com.

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