NEW YORK (TheStreet) -- Good day, traders!
1. First let's look at Cree, which develops, manufactures and sells lighting-class light emitting diodes, lighting and semiconductor products for power and radio-frequency applications. The company sells its LED, RF and other products in the U.S., China, Europe, South Korea, Japan, Malaysia and Taiwan.
Cree traded up 5.01% on Friday, closing at $49.66 per share.
- Friday's range: $47.21 - $49.72
- 52-week range: $44.52 - $76.00
- Friday's volume: 3,559,952
- 3-month average volume: 2,261,470
Cree is a rounded bottom breakout after Friday's close above the 50-day simple moving average. Shares traded lower during the month of April, then consolidated through most of May. By the end of May, the price action was trading above the bottom that had formed during the consolidation period.
Once shares traded above the 20-day simple moving average, that became a support level, and price action consolidated above the 20. On Wednesday, the chart formed a bullish piercing signal off the 20-day simple moving average, and didn't confirm until Friday when the price action moved up over 5%.
Cree is also forming a cup and handle chart pattern, which get its name for looking like a coffee mug with a handle.
I would look to enter this trade above the 34-day simple moving average, which is at $48.56. I would set a stop at $46.90-ish, which is just below the recent consolidation levels. I would target the 200-day simple moving average, at $58.03, which is almost 17% to the upside.
There isn't much resistance between Friday's close and the 200-day simple moving average. The only resistance to speak of is at the gap-down price of $53.05 to the 200.
I'd start with a one-quarter position, and add to the position on strength and on confirmation of the breakout.
Stay long until you see a confirmed sell signal or a close below the t-line.
Next up: Financial Engines and Isis Pharmaceuticals.