MICROCHIP TECHNOLOGY INC is setting up nicely for a breakout.

Our stock screener has spotted MICROCHIP TECHNOLOGY INC (NASDAQ:MCHP) as a possible breakout candidate. A technical breakout setup pattern occurs when the stock is consolidating after a nice uptrend. Whether the actual breakout occurs remains to be seen of course, but it may be interesting to keep an eye on NASDAQ:MCHP.

Technical Analysis Observations

ChartMill assigns a proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.

Overall MCHP gets a technical rating of 8 out of 10. Both in the recent history as in the last year, MCHP has proven to be a steady performer, scoring decent points in every aspect analyzed.

• The long and short term trends are both positive. This is looking good!
• When comparing the yearly performance of all stocks, we notice that MCHP is one of the better performing stocks in the market, outperforming 87% of all stocks.
• MCHP is one of the better performing stocks in the Semiconductors & Semiconductor Equipment industry, it outperforms 70% of 106 stocks in the same industry.
• MCHP is currently trading in the upper part of its 52 week range. The market is still in the middle of its 52 week range, so MCHP slightly outperforms the market at the moment.
• In the last month MCHP has a been trading in the 78.96 - 87.00 range, which is quite wide. It is currently trading in the middle of this range, so some resistance may be found above.

Why is NASDAQ:MCHP a setup?

ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. NASDAQ:MCHP scores a 9 out of 10:

Besides having an excellent technical rating, MCHP also presents a decent setup pattern. Prices have been consolidating lately. There is a resistance zone just above the current price starting at 85.34. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 81.8, a Stop Loss order could be placed below this zone. Very recently a Pocket Pivot signal was observed. This is another positive sign.

Trading breakout setups.

One way to play this would be to wait for the actual breakout to happen and buy when the stock breaks out above the current consolidation zone. A possible place for a stop loss would be below this zone.

This article should in no way be interpreted as trading advice. You should always make your own analysis and trade or not trade based on your own observations and style. The article is based purely on some technical observations.

Our Breakout analyzer lists more breakout setups and is updated daily.