Altera Corporation is a global semiconductor company. The company designs, manufactures, and markets high-density programmable logic devices (PLD), HardCopy ASIC devices, pre-defined design building blocks known as intellectual property cores, and associated development tools. Its PLDs, which consist of field-programmable gate arrays, and complex programmable logic devices, are semiconductor integrated circuits that are manufactured as standard chips that its customers program to perform desired logic functions within their electronic systems. With its HardCopy devices the company offers its customers a migration path from a PLD to a non-programmable implementation of their designs. Its customers can license IP cores from the company for implementation of standard functions in their PLD designs.
Please review the 1 yr chart of ALTR (Altera Corporation) below with my added notations:
ALTR has been trading mostly sideways for most of the last year. During most of that time the stock has been holding a very important level of support at $34 (blue). No matter what the market has or has not done over the last year, with the exception of October, ALTR has always held the $34 level. However, the stock’s overall trend lower (red) over the last 3 months is a concern considering the overall stock market has moved higher during that time.
The Tale of the Tape: ALTR has a very important support at $34. A long trade could be made on a pullback to $34 with a stop placed under that level. However, the stock appears to be preparing to break lower, and if it does, a short trade should be made with a stop placed above $34.
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? If you haven’t thought about it, review the overall indices themselves. For example, take a look at 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!
Christian Tharp, CMT