1. First, lets look at Entropic, a fabless semiconductor company that designs, develops and markets semiconductor solutions to enable home entertainment.
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Entropic traded up 0.34% on Wednesday and closed at $2.95.
- Wednesday's range: $2.84 - $3.02
- 52-week range: $2.44 - $5.12
- Wednesday's volume: 1,641,948
- Three-month average volume: 751,173
Entropic's stock looks good technically, because it is in a rounded-bottom breakout. It has closed above the 50-day simple moving average for two days in a row, confirming the breakout. On Tuesday, shares gapped up over the 50-day simple moving average and had a trading range of about 10%. This week marks the first time shares have traded over the 50-day simple moving average since March.
I'd look to enter this trade when the stock is at more than the 50-day simple moving average, which is at $2.82, and when it's no higher than Wednesday's close, which is at $2.95. I'd set my stop at about $2.76, which is at the 34-day exponential moving average. I would target the 200-day simple moving average at $3.71, which would mark is 25% gain.
There is overhead resistance at about $3.06 and $3.30 before the 200-day exponential moving average. I would look for a sell signal at these levels, or look to add to this position on a break above these resistance levels. Stay long until you see a sell signal, or a close below the t-line.