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Semiconductor Stock Rolls Over At Channel Resistance | The Mesh Report

Semiconductor Stock Rolls Over At Channel Resistance

Christian Tharp, CMT November 21, 2022 Comments Off on Semiconductor Stock Rolls Over At Channel Resistance

Synaptics, Inc. engages in the development, marketing, and sale of human interface semiconductor solutions for electronic devices and products. It specializes in custom-designed human interface that enable people to interact with mobile computing, communications, entertainment, and other electronic devices.

Take a look at the 2-year chart of Synaptics (SYNA) below with my added notations:

Chart of SYNA provided by TradingView

SYNA has formed a declining trend channel over the course of the past year. A channel is formed through the combination of a trend line support that runs parallel to a trend line resistance.  SYNA tested its channel resistance last week and seems to be rolling over again.

The Tale of the Tape: SYNA has formed a down channel. A long trade could be entered on a pullback to the channel support, which is currently approaching the mid-$60’s, or on a break of channel resistance. Short trades could be entered at channel resistance or if the stock were to break below the channel support.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? For example, analyze the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key…

Good luck!

Christian Tharp, CMT

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