SIMO Silicon Motion Technology – Semiconductor Stock With Blue Sky Potential

by Olivier on January 22, 2015

The chart of SIMO – Silicon Motion Technology is a stock offering ‘Blue Sky Potential’. That will obviously only be the case once the bullish cup with handle pattern completes. A completion of the pattern will coincide with a break out to new all time highs. We are not there yet. Also keep in mind the company will announce earnings on Jan 26th.

Still, the chart looks very constructive and the All Time High should act as a price magnet. Overall the semiconductor sector looks very healthy. Therefore odds for stocks like SIMO to be outperforming are very high. The reason is simple: they have almost no overhead resistance. One way to play SIMO would be to buy an initial position and to add more if the stock reacts positively to earnings.

Click on SIMO chart to enlarge:

Conclusion: The whole reason for this post is to highlight a chart set-up with ‘Bullish pattern pressure + Blue Sky Potential’. This is the best and most bullish combination you could ask for. Of course earnings are due next week and as usual there are no guarantees. Then again, trading is not about guarantees but about putting odds in your favour.

SIMO company description from Yahoo finance:

Silicon Motion Technology Corporation, a fabless semiconductor company, designs, develops, and markets semiconductor solutions for mobile storage and mobile communications markets. It provides mobile storage products, including microcontrollers used in solid state storage devices, such as solid state drives, eMMCs, and other embedded flash applications, as well as removable storage products, such as flash memory card controllers and USB flash drive controllers; and mobile communications products, such as mobile TV SoCs and handset transceivers. Its products are used in smartphones, tablets, digital cameras, notebooks, desktop PCs, and industrial and commercial applications. The company’s mobile storage products are marketed under the SMI brand and mobile communications products under the FCI brand. It markets and sells products through direct sales personnel and independent electronics distributors to original equipment manufacturers and module makers worldwide. Silicon Motion Technology Corporation was founded in 1995 and is headquartered in Zhubei City, Taiwan.

I always believe that prices move first and fundamentals come second. – Paul Tudor Jones


Investing in your education always pays. Learn how to read chart patterns like a pro! Tischendorf Letter Premium:

Previous post:

Next post: