Lumentum Holdings Inc. (LITE) had a rough start to its trading day on December 12, but things turned around fast once a key technical signal flashed. Here's what happened.
The Morning Decline and Reversal
At 11:04 AM EST, LITE triggered what's called a Power Inflow signal at a price of $327.32. This came after the stock had already dropped as much as 9% during the opening hour of trading. Not exactly a great morning for shareholders.
But here's where it gets interesting. Right around the time of that signal, order flow data showed both retail and institutional traders pivoting toward the buy side. The stock price responded immediately, climbing steadily throughout the afternoon. By 2:45 PM EST, LITE had reached an intraday high of $339.61, representing a gain of 3.75% from the signal price. That's a pretty solid bounce for anyone who caught the reversal.
What Exactly Is a Power Inflow Signal?
The Power Inflow alert is a proprietary signal developed by TradePulse, and it's designed to spot shifts in market momentum early. Specifically, it fires within the first two hours of the trading day when there's a significant surge in buying activity based on order flow analysis.
Order flow analytics dive into real-time buying and selling patterns by examining volume, timing, and order size across both retail and institutional participants. The idea is that by tracking who's buying and selling (and how aggressively), you can get a clearer picture of where a stock might be headed next. When buying pressure overwhelms selling pressure in a meaningful way, that's when alerts like Power Inflow get triggered.
The signal is intended to highlight potential bullish momentum and identify opportune entry points for traders looking to capitalize on intraday price movement. It's particularly useful during volatile sessions when stocks experience sharp declines followed by reversals.
Breaking Down LITE's Performance
At the moment the Power Inflow signal fired, LITE was trading at $327.32. Following the alert, the stock climbed to an intraday high of $339.61 as of 2:45 PM EST, marking a 3.75% gain.
This kind of reversal is exactly what traders monitoring order flow analytics hope to catch. The stock had been in freefall during the morning session, but the shift in buying interest provided a clear inflection point. Anyone who entered shortly after the Power Inflow signal had the opportunity to capture meaningful intraday gains.
Why Order Flow Matters
Today's Power Inflow alert on LITE demonstrates how real-time order flow data can reveal bullish momentum even during periods of weakness. The stock was down sharply before the signal, but the underlying buying pressure suggested a potential reversal was brewing.
For active traders, these kinds of alerts offer a data-driven edge in identifying short-term opportunities. The immediate gain following the Power Inflow signal highlights the value of monitoring order flow trends and spotting when market participants are stepping in to buy aggressively. It's not a crystal ball, but it's a useful tool for reading the room when markets get choppy.
This article is for informational purposes only and does not constitute financial advice, investment recommendations, or a solicitation to buy or sell securities. The analysis is based on stock order flow data, but accuracy is not guaranteed. Investing involves risk, including possible loss of principal, and past performance is not indicative of future results. Please consult a licensed financial advisor before making any investment decisions.