VNX trade ideas
$NXPI 115 support 118 resistanceTender offer expiring next week, expecting new tender at 120 + $QCOM shares.
NXPI is setting up in a large cup w/ handleThe semi-conductors are getting ready to make another run (check out SMH) and there are lots of names in the space that are looking strong.
I like NXPI for several reasons. Let's talk about the base:
1. It's setting up in a giant cup w/ handle that is about a year and a half long. The left side of the base is wide and loose and the right side of the base, particularly the handle area, has tightened up significantly. When we see tightness just as the pivot is forming, it allows a much more favorable reward to risk entry.
2. The long term moving averages (40wk line and 10wk line) are both turning upward, indicating momentum to the upside.
3. The RS line is leading the way and is trending higher
4. The lower part of the handle has pulled in quietly, on very light volume, into the 50dma. This both shows sellers drying up AND offers a good logical place for support
The industry group, as mentioned earlier, is setting up for a move higher. Per investors.com the semi-conductor group is ranked 5 out of 197. Additionally, in my own stock scanner ChartYourTrade MRI, (learn more here chartyourtrade.com) the semi-conductor group has returned the 2nd most number of stocks. When large numbers of stocks from the same industry group begin passing the scanner, its often been an indication that the group is preparing for a move. I believe we're seeing confirmation of that in SMH and in investors.com as well.
Triangle pattern about to finishThis stock will be in play in next one or two weeks. I'll just follow the trend.. waiting for some resolution out of this triangle pattern
NXPI Fib Extension to 93Based on the Low RSI and the Fib retracement, it looks as though we have found a bottom on NXPI. Depending on the RSI moving forward, I expect this trend to extend into the low 90's and probably to the first Fib Level. I'm long calls.
$NXPI: Back above the 200 DMANXPI broke above it's downward trend line back in April. Along with the broad pull back in the semiconductor space, NXPI pulled back and successfully re-tested the aforementioned trend line. With NXPI now back above it's 200 DMA (red), RSI on the rise and earnings due after the close on July 27, I expect NXPI to increase to at least the fibonacci 0.618 retracement of $87.06 and possibly the 0.764 retracement of $89.91 (up 7.34%).
