Have you heard the news? A “phase one” trade deal has been negotiated by the U.S. and China. Finally!
Now, President Trump just needs to give it the go-ahead to put the deal into action.
As a result, the much feared December 15th tariffs will be canceled, along with several other tariffs that have already been levied.
All in all, it’s a great day for bulls. The market’s number one source of stress just got its first significant de-escalation, and investors are roaring in approval – even if the deal itself might not achieve Trump’s ultimate goal:
The protection of American intellectual property in China.
We’ll find out in the coming days whether or not that’s part of phase one of Washington’s broader trade war demands. For this afternoon, though, that doesn’t really matter.
All that the market cares about is the fact that more tariffs aren’t coming on Sunday.
And while equities rise to another new all-time high, several stocks have distinguished themselves in the process – formerly oversold companies that now have a head of steam.
A few of them, like Juniper Networks (NYSE: JNPR), even look ready to go on a prolonged rally.
In the daily candlestick chart above, you can see that JNPR has done some serious selling since late November. The stock, which ran out of gas in early November, appeared oversold for several sessions.
But still, JNPR managed to set a higher low. Share prices recovered over the last two sessions, and now, the stock sits above the most recent minor trendline. This means that JNPR might make a bullish breakout tomorrow.
Supported by that higher low, along with contact with the lower Bollinger Band (BB), JNPR has tons of upward potential. The current daily candlestick is trading above the last four candle bodies, suggesting that a momentum shift has taken place. The stochastic indicator, after dropping below 20, has risen slightly as well.
With the upper BB miles away, JNPR has plenty of room to roam. An appropriately priced and dated call option could easily return triple-digit gains if share prices eclipse the highs from early November.
And with what I’m sure will be a “victory lap” from Trump tomorrow, bullish sentiment should continue to swell, causing oversold stocks like JNPR to enjoy a nice boost.
It hasn’t been the best month for JNPR shareholders, but after today’s trade war news hit, the stock could enjoy a great rally to close out the year.
