Sudden negative news for optical transceivers! AAOI's gap presents a buying-on-the-dip zone; position quietly in LITE and ASTS at low levels.

1. $Applied Optoelectronics (AAOI.US)$ The biggest negative catalyst for the optical transceiver sector today comes from AAOI. AAOI announced a plan to issue $600 million in new equity. Influenced by this dilution news, the stock dropped more than 10% in pre-market trading, bringing the price to around $109. However, here is the interesting part: the $109 level coincides with the gap left by AI stocks in early August. Therefore, for those who completely missed the earlier rally in AAOI, if you remain bullish on optical transceivers and can tolerate the high volatility associated with AI stocks, I suggest closely monitoring the $110–$103 range after the market opens. If AAOI enters this zone, consider making an initial entry. It is crucial to emphasize that AAOI is one of the most volatile core holdings in the optical transceiver space. Daily fluctuations of around 10% are normal. It is only suitable for aggressive investors who can accept high volatility. If you are uncomfortable with daily swings of approximately 10%, do not assume it is cheap simply because it has fallen significantly in pre-market trading. If you still want exposure to the optical transceiver sector but prefer not to gamble on highly elastic stocks like AAOI, I recommend shifting your focus back to LITE.

2. $Lumentum (LITE.US)$ Last Friday, LITE experienced a significant intraday surge followed by a pullback. Although the closing decline appeared to be only 1.5%, calculating from the intraday high of $920, the actual retracement was close to 5%. Compounded by the impact of Middle East tensions on pre-market trading today, the share price has returned to around $830. If you entered positions near $830 last week, your current price is back near your entry cost. As long as you remain bullish on optical transceivers, I believe there is no need for excessive trading activity. Among the core holdings in the optical transceiver sector, LITE's technical structure remains relatively strong. $780 serves as the most important sentiment support level since August. As long as this level is not effectively broken, I do not anticipate any extreme downside movement for now. The $830–$800 range remains a favorable area for initial staggered entries, with the first upside target still set at $950. Having discussed high-elasticity tech themes, let us now introduce a relatively low-positioned sector: commercial aerospace, specifically ASTS.

3. $AST SpaceMobile (ASTS.US)$ This stock has recently exhibited a notable technical pattern: after declining during intraday trading for four consecutive sessions, it consistently recovered to form significant long lower shadows. This indicates that buying support is emerging at lower price levels. From an industry perspective, commercial aerospace remains a long-term track with very high certainty over the next 2–3 years. In terms of current valuation, ASTS is only about 20% away from its absolute yearly lows. Furthermore, after two and a half months of correction, ASTS has not yet experienced a standard rebound. As we approach the fourth quarter, I believe the commercial aerospace sector may see renewed catalysts and capital attention. If you are currently fearful of high-elasticity tech stocks like memory chips and optical transceivers, and are unwilling to chase highs amid uncertainty in the Middle East, this sector can serve as a strategic low-entry position. Regarding upside targets, I suggest being bold and looking toward the $80–$90 range.

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