The Big 3: COHR, BE, NOW

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. Here to take us through the trades is Mike Shorr, Director of Trading Education at Prosper Trading Academy. Great to have you both with us. Mike would love to kick things off with a big picture thought on the market action we're seeing. We've got new highs in the S&P, another new high on the NASDAQ. How are you looking at it right now?

Mike Shorr (0:26)

Well, I'm looking at it that a lot of things don't make sense, but yet it still keeps going in the same direction, right? We have, you know, kind of the big thing, obviously VIX is down, but we also have that, we're continuing to make highs while yields are, let's just be nice and say that yields are holding, but they are, I mean, they're trending up, but yet the stock market keeps to go up. So I am cautiously bullish and it wouldn't really make me very surprised if we came down off of this, but then it's a buy. I mean, it's almost like a rinse, wash, repeat type of thing that we have all these things that are sitting in front of us, yet we have a market that keeps doing this.

Marlee Caden (1:22)

All right, so let's dive into your first pick then because Coherent has a very interesting chart. I mean, they really saw some nice action in the summer time, gave back some of those gains. It looks like they're trying to get back up there. But take us through Coherent because talking about these optics platforms has become a big part of the new conversation, the AI build out.

Mike Shorr (1:42)

Yeah.

And that's exactly what you would want to see happen. You know, not only does the stock make new highs, but when it comes back down, where do they come back in? And they're coming back in. I think that this is a breakout type of move.

Marlee Caden (2:02)

All right, KG, are you also seeing the potential for a breakout here from Coherent?

Kevin Green (2:09)

Yeah, definitely. I mean, we have seen a little bit of a consolidation or wedge pattern that has formed where we are making lower highs, but we are also still making higher lows. Now, if you kind of look at the stock around this time last year, higher highs, higher lows, a very strong trend line. So we got to around that 440 level, and that 440 level kind of created this topping pattern, if you will. Now, we did see a little bit more of a pullback in testing the 200-day moving average several different times, but we were able to hold that up. Now, we are kind of breaking out above the 20-day, the 50-day, as well as the 200-day moving average, and hitting this area of resistance around $338. If it's able to break out above that, $360 is going to be your first area of resistance, and then from there, you're just looking at the cycle highs, if you will. So the $400 level will be next, and then going back to those highs. MACD is also in a bullish formation with that 12 EMA above the 26 EMA, and you also have RSI making higher lows. This is actually a very constructive chart. If we even do get a breakdown, you still are fairly close to the apex here, so you're still looking at that 200-day moving average and the strong area support.

Marlee Caden (3:14)

I mentioned there the interesting setup we had. High is made over the summertime, but when you look longer-term at Coherent KG, what are you seeing there?

Kevin Green (3:24)

Yeah, I mean, it's still well-defined here. You have a, once again, primary trend line, a little bit of a bull flag pattern, just meaning that we are in a bull trend but a consolidation.

We have that wedge and we are attempting to break out on the weekly chart, and all of the lines pretty much still line up. Now, what gets you a little bit more optimistic around this name and on this chart is that weekly MACD is just starting to cross over with that 12 EMA above the 26 EMA. That's usually your follow through indicator where you could see five to six or even eight weeks of bullish action to the upside here. So this is a little bit more bullish than bearish. Once again, you break down the 200 day moving average is going to be key in that 50 week moving average at around $271 is going to be your next area of support, but this one looks pretty healthy as far as a potential breakout here, Marlee.