This Under $10 Stock Is a Technician’s Dream

by Sam Collins | October 22, 2013 1:38 am

TriQuint Semiconductor (TQNT[1]) — This mid-cap company is a worldwide developer and supplier of high-performance gallium arsenide microwave monolithic integrated circuits for wireless operations.

On Aug. 13[2], with the stock at $7.75, I said, “Annual gross margins are expected to grow by 32% in 2013 and 36% in 2014, according to S&P. Earnings per share are projected to be $0.06 in 2013 and $0.55 in 2014. S&P’s 12-month target is $10.”

Analysts say that 4G connections are expected to explode to 1 billion in 2017, which will benefit the company. On Sept. 16, it announced that its TriConnect 5 GHz WLAN front-end modules and premium LTE/Wi-Fi coexistence filters are being used by Broadcom (BRCM[3]). This could cause significant gains in revenue, which is already expected to increase 9% this year.

Technically, this stock is a technician’s dream with a list of textbook positive chart signals. TQNT’s initial breakout in late April was a picture-perfect break from a double-top, followed in May by a golden cross, a very bullish signal. Following a channel down consolidation from mid-May to mid-June, the stock jumped on a breakaway gap to over $8.

It broke from a bullish “V” formation in mid-September to a new high on Oct. 3 at $8.64. For several weeks in October, it consolidated with a triangle, and then broke to another new high Monday at $8.72.

I still view this as a good opportunity to buy this major supplier to the growing 4G market and the developing 5G market for mobile devices and Wi-Fi. The company is scheduled to release its Q3 earnings following the close of the market on Wednesday, Oct. 23.

TQNT Chart
Click to Enlarge

Chart Key[4]

  1. TQNT:
  2. On Aug. 13:
  3. BRCM:
  4. [Image]:

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