$VIAV – A 5G Trade with some Short Interest. (January 15, 2020)

by DAN VIAV 
This is Scott with your Free Chart of the Day. I want to take a look at Viavi Solutions ( NASDAQ: VIAV ). This is a 5G trade; 5G, of course, is the next evolution of cell phone reception or something. This stock has been holding above the 200-day moving average, that’s the blue line. It has been holding above since January of 2019.

As you can see it has been in a nice little uptrend here. Today VIAV ( NASDAQ: VIAV ) pushed above the 50-day moving average and did it on a pickup on volume so I like what is happening here. You can see that it continually prints higher lows and we are getting into kind of a triangle pattern here.

The thing with this stock is, there is a bit of short interest. There are about 7 days of short interest on this stock right here. Full disclosure, I did buy a position just before the close, I think my price is 15.69 or just below that, maybe a penny below. But here’s what I want to see on the stock: I want to see a move above 15.80 on volume and see if that break causes a little bit of a short squeeze.

Analysts have this stock at about a $19.00 price target, that’s about 17 percent higher. I don’t know if it will get there but I think if we get a little bit of short squeeze we could at least test the recent high back here from November, that’s about 3.5 percent. I would have an alert set at 15.80 on VIAV ( NASDAQ: VIAV ) just to take a look at it. If the stock pops and drops I am definitely going to close my position, but this could be a good 5G trade to keep on your watch list.

Free Chart