JDS Uniphase Corp (NASDAQ:JDSU) – Bulls Must Take It Above $16

Denver, CO, 08/14/2013 (Avauncer.com) –  JDS Uniphase Corp (NASDAQ:JDSU) (Closed: $14.80, Up: 0.00%) opened gap up on Tuesday but lost its opening gains later and closed in the flattest way possible. Interestingly, the volume at 8 million was much higher than the average volume of 3.5 million.

This stock is one of the fallen angels of the stock universe and a prime example of the boom and bust of the IT bubble that took place in the last part of the 1990s. It started its rally from a very modest low of $2 in 1994 and soared ever higher to reach a mind boggling high of $1227 by 2000. The crash was equally spectacular and it came down to $12.64 by 2002 only, losing in only 2 years about 99% of the gains made in the previous 6 years. The remaining 1% was lost by 2009 when it tested the original starting point of $2. In the arithmetic charts, it looks like exactly a Bell curve, a graphical representation of the Normal Distribution. But using the logarithmic scale, we can see some bullish patterns emerging as its latest attempt to make a bottom and a turnaround.

The pattern seen in the monthly charts is called an Extracting Triangle or a classical Inverse Head & Shoulders pattern. The breakout level is far away yet, but the implication is that long term bears are not that interested for now. That could be an opportunity for the bulls. The latest rally from the 2012 bottom of $8.47 is running in a rising channel and as long as $14.15 holds, more upside can be expected. The price is hitting a historical supply zone of $15.30 - $16.10. A successful breach of this price would take the stock closer to its 2011 top of $22 again.

The indicators are non-committal. Investors could take an entry above $16.10 for a good return in a small period of time.