Amkor Technology, Inc. provides outsourced semiconductor packaging and test services in the United States, China, Ireland, Japan, Singapore, Taiwan, Thailand, and internationally. The company offers turnkey packaging and test services, including semiconductor wafer bumps, wafer probes, wafer backgrinds, package design, packaging, and test and drop shipment services. Its packages employ wirebond, flip chip, and copper clip interconnect technologies; and leadframe and substrate package carriers are used for various testing services.
Take a look at the 1-year chart of Amkor (NASDAQ: AMKR) with the added notations:
AMKR started a 5-month decline in March that reached a bottom in June. After testing the June low a few times, the stock started a rally that lasted about 3 months. Over the past month or so, the stock has also created a key level of support at $6 (green) Now that the stock appears to be testing that support level again, traders should be able to expect some sort of bounce. However, if the $6 support were to break, lower prices should follow.
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The Tale of the Tape: AMKR has a key level of support at $6. A trader could enter a long position at $6 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.
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
Follow me on Twitter: @cmtstockcoach