Facebook (FB), GoPro (GPRO) and Groupon (GRPN) shoot higher on Q2 earnings beat. READ MORE

New Bullish Pattern Developing on This Semi Stock’s Chart

Microchip Technology appears to be forming an inverse head-and-shoulders


Microchip Technology (MCHP) — This leading semiconductor manufacturer develops specialized chips for embedded control applications. Since 1990, it has shipped over 7 billion PIC microprocessors.

Earlier this month, the company raised EPS guidance $0.02 for its fiscal first quarter, scheduled to be reported on July 29. Credit Suisse has increased its estimate for fiscal year (FY) 2014, ending in March, from $2.26 to $2.30, and its estimate for FY 2015 from $2.54 to $2.67. The stock has a dividend yield of 3.8%.

For seven months, the stock traded within a 9-point range from $29 to $38. But buying volume is increasing, our internal indicator, the Collins-Bollinger Reversal (CBR), recently flashed a buy signal, and the new pattern forming from the handle of an extended cup-and-handle appears to be an inverse head-and-shoulders. A break above $38 provides a trading target of $46, but long-term investors could see much higher returns.

MCHP Chart
Click to Enlarge
Chart Key

Article printed from InvestorPlace Media, http://investorplace.com/2013/06/trade-of-the-day-microchip-technology-mchp/.

©2016 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.