It's been a solid year for InvenSense (INVN); the small-cap motion interface device maker has rallied more that 36% in the trailing 12 months. And like the other technology stocks on our list of trading setups, INVN looks well-positioned for even more upside in 2014.
That's because INVN is currently forming a cup and handle pattern, a classic bullish price setup that's formed by a cup-shaped rounding bottom in shares that's followed up by a short-duration channel down. The buy signal comes on a move through the pattern's price ceiling at $21. Shares are pushing up very close to that level in today's session thanks to news that a lingering patent dispute is getting settled.
Like with MU, the 50-day moving average has been a pretty good proxy for support all the way up in shares of InvenSense. It makes sense to keep a protective stop below that level in case this trade loses traction.