Veeco Instruments Inc. (NASDAQ: VECO)

Veeco Instruments Inc., together with its subsidiaries, designs, manufactures, and markets various equipments to make light emitting diodes (LEDs) and hard-disk drives worldwide. The company’s LED and Solar segment designs and manufactures metal organic chemical vapor deposition and molecular beam epitaxy systems and components for the manufacturers of LEDs, wireless devices, power semiconductors, and concentrator photovoltaics, as well as to research and development applications. Its Data Storage segment designs and manufactures various technologies, including ion beam etch, ion beam deposition, diamond-like carbon, physical vapor deposition, chemical vapor deposition, and slicing, dicing, and lapping systems to create thin film magnetic heads that read and write data on hard disk drives. The company was founded in 1945 and is headquartered in Plainview, New York.

To review Veeco’s stock, please take a look at the 1-year chart of VECO (Veeco Instruments, Inc.) below with my added notations:

1-year chart of VECO (Veeco Instruments, Inc.)

VECO has created a couple of important price levels to watch. First, VECO has formed a clear resistance at $38 (red), which would also be a 52-week high breakout if the stock could manage to break above it. In addition, the stock is climbing a short term, up-trending support level (blue) over the last (3) months. These two levels combined have VECO stuck within a common chart pattern known as an Ascending Triangle. Eventually, the stock will have to break one of those two levels.

The Tale of the Tape: VECO has an up trending support and a 52-week resistance level to watch. A long trade could be made on a breakout above the $38 resistance or on a pullback to the up trending support, currently sitting near $34. A break below the up trending support could be an opportunity to enter a short trade.

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!

Good luck!

Christian Tharp, CMT