Harmonic Holds the 50-day

It’s often interesting to find stocks making new highs when the market tanks. Today’s chart focuses on such a name: Harmonic.

Notice how the provider of video software advanced in late September and early October as the S&P 500 and Nasdaq-100 hit new 52-week lows.

That relative strength followed an Analyst Day on September 15. Heavy volume occurred as prices rose the next session, a potential sign of new buying after the event.

HLIT then rallied about 40 percent. It reported better-than-expected quarterly numbers on October 31, but traders “sold the news.” The shares proceeded to form an A-B-C correction but are trying to bounce at their 50-day simple moving average (SMA).

Next, the pullback held a 50 percent retracement of the preceding rally.

Finally, stochastics are trying to rebound from an oversold condition.

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