Schwab Network on $LITE (Oct 27, 2026)

matter of Lumentum. This represents a year-on-year increase of 109.3% in the fourth quarter of fiscal year 2026. Their income position, i.e. their revenue adjustment, increased by 4.32%.

Although our shares fell 13.12% in that 30- day period.

So, that's the divergence I'm looking for. Sales up more than 13% , but EPS revised a little over 4%. This divergence is telling me that we could potentially see a bounce or turnaround.

And of course, that debt-to-equity ratio, which I'm adding alongside free cash flow, because we need to pay more attention to the way the bond market is affecting equity. That was around 0.36.

So, we want to see a low debt-to-equity ratio , which assures me that they are financing their own income rather than borrowing.

So, this is actually part of that AI narrative. I know we talk about this a lot, but this is the main reason behind the market and earnings correction.

Lumentum is up 6% today. Yes, we'll keep it relatively simple. Let's look back to February of this year. There we saw a clear upward trend or ascending channel , where support and resistance levels were very well understood.

The stock traded like that for about two and a half to three months , after which it stalled and fell below the 20- and 50- day moving averages. The stock then fell to the 200- day moving average and after staying there for 2 days , it saw aggressive buying that created a short-term bounce.

Once again, this creates another upward channel for about two and a half to three months , where higher highs and higher lows are seen , but then the price falls again. Now, we re-examine the 200- day moving average.

We were there for about 2 days. Buyers have come forward and we are at that stage now. The stock is up about 6% in today's session.

What you are seeing is the support area of ​​the previous channel, which is now acting as a resistance area. It is around $900. If it crosses this, you can look at the 50 and 20- day moving averages.

If you break above that, you will be looking at the upper limit of support or resistance, which is around $1,100.

Now, you can be a little more optimistic about this share. The RSI looks like it has reached a low and is moving upwards. The MACD is turning again. It would be wrong to rush too much, but it may be reasonable to invest a little at the current level in anticipation of a MACD cross , which if it happens could yield good results in the next few weeks.

Now, looking at the weekly chart, I see something quite interesting for this stock. Obviously, if you look back to April 2025, the stock was trading at around $57. Nobody really bothered with it, then you started to see the impact of AI and obviously it's been on an upward trend pretty quickly.

But we have a kind of cup and handle, a specific cup and handle pattern here, with the 50- week moving average acting as a support area. The 20- week moving average is now acting as a resistance.

Looking at the RSI, we see a downward trend , while the MACD is giving a slightly bearish or bearish signal here.

You need to get above that 20- week moving average , which is 865. We are trading on it now. You must close on it to be sure by the end of the week. You can also see in the volume profile that there has been significant volume in the area around 890 over the last 3 years or so.

Cautiously optimistic about this matter. If you go back, retest the 1085 level and breakout , you can expect another $250 increase in the upward trend from there. 12, let's say from 1250 to maybe even 1300 dollars.

So at the end of the day, this is actually a really constructive chart. While it looks weak in some places in the long term, if you can recapture some of those key moving averages on a weekly basis , I think you can be a little more optimistic about it.

Okay. As we see it now, Momentive is trading up 6.5% at 871.02 and they have an earnings event on November 5th, so this could be a potential catalyst in the near future.