September 1, 2016

Stock Alert and Chart Analysis: AMBA


  In these stock alert and chart analysis posts, I want to highlight a security that is on fire for some reason. Either the security's chart looks amazing and/or social media is going nuts about it.

  If you need a technical analysis refresher click here, and if you want to learn how I trade breakouts click here.

  Okay, let's get to work!

Stock: AMBA, Ambarella, Inc.

Long-term Weekly Chart Technical Analysis:

AMBA is clearly in a very strong bull trend and a double off April $35 lows. But that's the exact problem--this stock has gone straight up for weeks and weeks. AMBA is also nearing some serious resistance from July and April 2015.

Long-term Weekly Chart Gameplan:

You don't short a strong bull trend until you get some sort of evidence of a trend reversal. There is exactly no evidence of that right now. In fact, strong trends like this--even if there happens to be a bad week next week and the week after--tend to retest the highs afterward (aka a breakout pullback). That's when I'd start looking for the short.

For now, trade with the trend until it bends.

Short-term Daily Chart Technical Analysis:

Short-term Daily Chart Gameplan:

AMBA's daily chart is also in a very strong bull trend. The price has been straight up since the August $67ish breakout. However, there are some serious wicks--meaning panicky longs.

Trade with the trend until it bends. So I'm bullish until the trendline from August to now breaks. If that trendline breaks, I'd be shorting any pops to the $72 highs.

What are your thoughts on AMBA? Let's discuss it in the comments below. Many minds are always better than one!


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