If we back out what we think we may know about the markets and the Semi sector and just look at one stock in a vacuum we see that SIMO is dropping once again to its SMA 50 in a classic stair-stepping uptrend. We NFTRH+’d it when it did this in late April… and here it is again, at another theoretical buy point; which means if you like the stock and feel its prospects are good, this is a pullback to be bought by a bull. It’s a classic pullback within an existing trend.
The ‘stop loss’ would be to suit risk tolerance on a break below the SMA 50, currently at 49.82 and rising. The S/T target would be a ‘higher high’ proportionate to previous up legs. All trends end sooner or later, but this one as of now, is intact.
RSI is at the level that other buying opportunities within the uptrend manifested.
The weekly view introduces the cautionary point that SIMO is reacting downward from its all-time high, and the upside target off of the Q4 2016 to Q1 2017 pattern has been reached. Targets are not stop signs, but it is all the more reason to respect the daily SMA 50 above on a daily closing basis. Maybe it can get a little wiggle room, but I’d keep it pretty strict.
For true believer investors, the uptrend theoretically is not broken until/unless it drops below the May low just under 47. That would be a test of the pattern’s top (neckline, not shown).
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.