NXP Semiconductors NV (NASDAQ: NXPI)

NXP Semiconductors NV is a holding company, which engages in the provision of semiconductor solutions. It focuses on high performance mixed signal (HMPS), which delivers high performance mixed signal solutions to its customers to satisfy their system and sub-systems needs across the application areas such as automotive, identification, mobile, consumer, computing, wireless infrastructure, lighting and industrial, and software solutions for mobile phones.

Take a look at the 1-year chart of NXP (NASDAQ: NXPI) below with added notations:

NXPI had been consolidating over the pas several weeks, while also stalling at the $120 level (green). That level was NXPI’s 52-week high resistance barrier, and now that the stock has broken above it, traders could expect it to take another leg higher.

The Tale of the Tape: NXPI broke its 52-week resistance at $120. The ideal long position on the stock would be on a pullback down to that level with a stop placed under it. A break back below $120 could negate the forecast for a move higher.

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