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NFTRH+; Silicon Motion in the Wake of Micron Technology

Micron Technology had a pleasant surprise for the market and some items in the Semi sector are boosting up on it.  Ref. this pump piece by Jim Cramer, including usual suspects (former NFTRH+ ideas AMAT & LRCX) as knock-on beneficiaries.

But I am more interested in another of my long-time Semi favorites.  That is Silicon Motion (SIMO), a chip maker, not a chip equipment maker like the two noted above.

This article gives a primer on Micron’s move to 3D NAND/Solid State Drives (SSD).  That barks right up the tree of SIMO, which is a NAND/SSD provider, and I think that SIMO got a knock-on bump due to its role in support of Micron, before pulling back today.  If interested, you might want to research this more fully because I am just generalizing.  It is the technicals that NFTRH+ wants to focus on.

The price has popped above a downtrend line but met with a well defined resistance area today, and recoiled.  Should SIMO get through 47.50 and hold that for a couple days (or a weekly close), the conservative target would be 50, and a less conservative one would be 54.

Positive:  Price is above both the 50 and 200 SMAs, RSI is positive and MACD is constructive (triggered up).  Unlike much of the market, SIMO is well off of its highs and not at all overbought.  I think much of this owes to its headquarters location in the political football known as Taiwan.

Negative:  The 50 and 200 SMAs are “death” crossed (DC) down, but as often happens during this over hyped condition, the stock has bounced.  But some people care about the DC, so it is noted.  Also, MACD is still below zero, a minor negative.

simo

 

Buy Target:  Current level if willing to gamble on a breakout.  A break and hold above 47.50, otherwise.

Sell Target:  50 (conservative), otherwise 54.

Stop Loss:  Below the SMA 50 (around 44.50, conservative) otherwise definitely below 42.50.

A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the buy, sell, stop parameters are already noted. They are meant as a starting point for further research if interested. I will not personally buy every item highlighted and will sometimes sell – without prior notice (because this takes time and resource away from NFTRH’s main functions) – any item that I do buy, below target, which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.