Lumentum Holdings Inc. (NASDAQ:LITE) stock is trading higher on Thursday. The California-based technology firm is experiencing upward momentum alongside other companies in the fiber optic connectivity sector. The Nasdaq is up 1.55% while the S&P 500 has gained 0.72%. • Lumentum Holdings stock is surging to new heights today. Why are LITE shares rallying?Sector Catalysts Boost Demand OutlookMeta declined to comment on the development following a Benzinga inquiry.Infrastructure Expansions Signal Sustained AppetiteDecreasing Short Interest Supports UpsideMarket data indicates that short interest in Lumentum decreased during the latest reporting period, dropping from 10.22 million to 9.29 million shares. This short interest accounts for 13.22% of the company’s publicly available float. Based on an average daily trading volume of 6.21 million shares, short sellers would require 1.5 days to cover their positions.LITE Stock: Key Levels and Momentum IndicatorsEven after today’s jump, Lumentum is still trading 5.3% below its 20-day SMA and 11.3% below its 50-day SMA, which keeps the near-term trend in "repair mode" despite the strong session. At the same time, the stock remains 42.1% above its 200-day SMA, so the longer-term uptrend is still intact even with recent volatility. RSI is the cleaner momentum read right now: at 46.23.The moving-average structure is mixed, with the 20-day SMA below the 50-day SMA (a bearish near-term alignment) even as the 50-day SMA remains above the 200-day SMA (a bullish longer-term backdrop). That combination often produces sharp countertrend rallies that still need follow-through to flip the short-term trend back up.