The Big 3: CEG, NTAP, CIEN

Marlee Caden (0:02)

Welcome back to Trading 360 I'm Marlee Caden. It's time for the big three. We've got three stocks, three charts, and three trades for you. Kevin Green taking us through the charts today. Here to take us through the trades, Jason Brown, stock market expert at thebrownreport.com and author of Five Year Millionaire. Great to have you both with us. Jason, you know how this goes. Kick things off for us with a big picture thought on the market action we're seeing. We had the solid bond auction yesterday. We got the Fed notes leaning a little hawkish. How are you looking at the markets right now?

Jason Brown (0:32)

Yeah, Marlee, Kevin, good to see you guys. The market is still in an uptrend, but investors are just starting to question, how much are they willing to pay for growth when interest rates and oil prices are moving higher? You got the S&P 500 sitting near all time highs. The question still remains, can we break through and go higher? Then when you look at the NASDAQ, NASDAQ did break through and hit a new 52-week high, I think three days ago.

That's telling us that tech is part of the rally of the S&P 500, but we need the rest of the market to come along with it. Then the Dow Jones Industrial Average is just struggling right now.

We need participation from the rest of the sector. We're still bullish, but as I like to say, we're cautiously bullish right here.

Marlee Caden (1:17)

All right. You're cautiously bullish and you've got some names in this big three today that have had some major headlines tied to them even just this week.

Let's start here. Constellation Energy is your first one. They of course have that big deal. They signed with Google. They gave them a really nice pop, giving back a little bit of that today. But how are you looking at Constellation Energy, Jason?

Jason Brown (1:38)

When you take a look at Constellation, they're one of the biggest electricity producers in United States and specifically one of the largest nuclear power plant producers.

Everyone understands that AI companies need chips, but also AI companies need electricity. They need power and the major advantage of nuclear power is that it could produce large amounts of electricity around the clock without shutting down pretty much. So when you think about wind, you think about solar, you think about other ways to generate power, they're kind of weather dependent. There's some external sources there that can affect it, but nuclear can be reliable for a long period of time. So that's why I like this one. You got to deal with Google for 20 years out to have this nuclear power plan megawatt delivery system or storage power delivered to their AI facilities. Other facilities are going to most likely come on board and need power. And so this is not a trend that's going to end anytime soon. We all know that we need more power and this is a company leading the charge in it. And from a technical standpoint, I know Kevin will look at it, but the stock has built a nice base around the $250 area. And so I like that we have, at least for right now, some short-term support and we have a potential defined upside that the stock can move to.

Marlee Caden (2:57)

And KG, I'm looking forward to your breakdown because this is a fun chart to look at and if you're seeing also a support around $250.

Kevin Green (3:06)

It is a fun chart. Actually, if you look at this time last year, we did see the stock trading at around $400 or so. We had a double top pattern taking place. It was valued at a pretty rich valuation, especially for power producer. We started seeing a stair step approach movement back to the downside where we consolidated, we broke below the 20-day, the 50-day moving average and eventually the 200-day moving average. But buyers have been able to step in at around this $250 level. We saw that back on February 5th, where we tried to have a little bit of a rebound. We came back, retested to 50 and we have been making higher lows for the most part ever since. Now, I wouldn't call this a full on base as of yet. The only reason why is because we still have to actually recover several different areas of resistance. The 307 level is going to be the first one that we have to be able to get above and close. And today, we actually hit 306.99 before we started seeing a selloff here. So not really a good price action for today, but let's see if we can leverage that 200 day moving average. If we're able to break above 307, you're looking at 325 And then that's when you get that full on base effect that actually does occur for the stock. Now, RSI has been in a really decent range for the upside, the positive price momentum. MACD is probably where you get the most bullish for this name. 12 EMAs above the 26 EMA, at least on the daily chart. Now, if we go to the weekly, you can kind of see the same type of action. Over the last three years, we've been in a megaphone pattern to the upside. That just means that we have a positive trend, but we will see some volatility within the name. And that's exactly what we have seen. We have this pullback kind of taking place right now, testing the 50 week moving average. And we do have that MACD on the weekly, still the 12 EMA above the 26 EMA, which is bullish. You'd like to see that get above the zero line for us to really get another ramp to the upside. But I think if you kind of break out and you get to this 325-ish area, you can make the case that maybe $400 could be in the radar for this name over the next couple of months.