Stocks To Watch: Ciena Corporation (CIEN) and Brocade Communications Systems, Inc. (BRCD)
New York, NY – GDP INSIDER – 04/15/2014.
This article discusses two companies: Ciena Corporation (NYSE:CIEN) and Brocade Communications Systems, Inc. (NASDAQ:BRCD)
Ciena Corporation (NYSE:CIEN) was a top performing stock yesterday. It increased in value by $1.46 or 7.3% to $21.38. The stock is close to its 52-week high of $22.94 and momentum could carry the shares higher. The RSI for Ciena Corporation is currently 82, and it leads us to believe there is more upside before downside pressure mounts. The shares of Ciena increased after a new broke that Alcatel Lucent SA (ADR) (NYSE:ALU) was in talks with Nokia Corporation (ADR) (NYSE:NOK) about a possible acquisition. Other communications equipment makers also increased in value based on the news. Ciena Corporation is a competitor of Alcatel-Lucent in optical transport and switching. Speculation of more consolidation in the sector is behind the increase in Ciena. It could be involved in additional deals. The company produces fiber optic networking equipment. Its customers are largely telecom companies. It stands to gain from Verizon’s 100G network build out in the U.S. The prospects from Verizon combined with upside from M&A activity contribute to our positive outlook on CIEN.
Brocade Communications Systems, Inc. (NASDAQ:BRCD) lost $0.36 to finish the day at $11.84. It underperformed the sector yesterday and was down by 3% in trading. The shares continue to trade towards the top of their 52-week range. Brocade Communications Systems is a provider of storage area networking and Internet protocol networking solutions. Brocade’s decline moved it below its exponential moving average, and it could see further downward momentum. Both the RSI and MFI indicators of 58.6 and 45.9 show no clear signs of support or strong indicator one way or the other. While Brocade beat first quarter estimates and had strong sales, some analysts doubt that the performance is sustainable. The provider of network devices to data centers has yet to show consistency in its business. Reports from Oppenheimer and Morgan Stanley question the long-term performance for the shares.
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