As Rayno Report has been reporting, the optical stocks have been on a nice little rollar coaster recently, selling off viciously after what was a pretty spectacular run boosted by telecom equipment spending cycle. What's next?

Research firm MKM Partners issued a note today saying the recent Optical Freakout (yes, capitalized) -- in which many stocks took 10-15% hits -- represents a good buying opportunity.

“With the catalysts of the FFIV Analyst Day later this week and CIEN and FNSR earnings within a month we see buying opportunities,” wrote MKM Managing Director Michael Genovese, referring to Ciena (CIEN), Finisar (FNSR), and F5 Networks (FFIV), for those of you who aren't as fluent on stock ticket symbols.

Genovese is bullish on all of these stocks, pointing to a disconnect between the market and near-term potential strength.

“FFIV primarily plays in the Enterprise and Government verticals but is outperforming its peers driven by a product cycle, setting up the opportunity to significantly accelerate product revenue growth over the next couple of quarters,” writes Genovese.

Hmmm. Okay. Might want to cover. (Dislosure: in the Rayno Report's policy of transparency, the author is currently short FFIV -- and in the money thank you very much. But after reading the note and writing this story, he is considering covering and may do so by tomorrow depending on the action in the stock.)

Genevese points out that in the past three weeks, CIEN is down 15%, FNSR is down 11% and FFIV is down 7% (vs. S&P 500 up 2%). He sees upside in both Finisar and Ciena's upcoming earnings. Finisar reports on Dec. 4th. Ciena is expected to report on December 12.

Genovese believes Ciena is carrying over strength in new optical buildouts at Verizon (VZ) and AT&T (T). There is also strong demand for Ciena's packet-optical gear, writes Genoveses. Likewise, Finisar is likely set to report another strong quarter, he wrote. Many of these stocks were hit recently on fears of a spending slowdown.

All of these stocks were climbing today in mid-day trade, after MKM's note came out. Ciena was up .24 or 1%, to $23.23; F5 was up .60 (.5%) to $82.62; and Finisar climbed .26 (.9%) toi $23.26.