All the Right Moves?

All the Right Moves

While this chart does not show it, Inphi Corp., IPHI, a semiconductor company right here in our backyard rose almost 600% from the end of 2012 until the beginning of this year. Since peaking early this year, it fell 35% and then began to consolidate sideways (underneath blue horizontal resistance zone) bouncing between $32 and $41/share.

san ramon fee only cfp retirement planning investment advisor 11-29-17 iphi.png

Interestingly, last week it broke and closed above resistance on higher than average volume. Since then, as quite often happens, price is back-testing that same level testing support on lower than average volume.  Yesterday closed with a hammer candle which, if we get confirmation in the next few sessions, indicates at least a temporary bottom. A breakout from this horizontal pattern indicates a price target back up to January’s highs which is more than 22% higher.

A price correction followed by at least a six month consolidation, a breakout on higher than average volume with a back-test of support is an almost perfect setup from this technicians view. A hold above support provides a compelling argument for additions to patient, risk tolerant investor's portfolios.