NASDAQ:MCHP may be ready to breakout.

MICROCHIP TECHNOLOGY INC (NASDAQ:MCHP) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NASDAQ:MCHP.

Deciphering the Technical Picture of NASDAQ:MCHP

ChartMill employs a sophisticated system to assign a Technical Rating to every stock in its analysis. This rating, which ranges from 0 to 10, is determined by carefully assessing multiple technical indicators and properties.

Overall MCHP gets a technical rating of 8 out of 10. MCHP has been one of the better performers in the overall market. Some doubts were observed in the medium time frame, but recent action was again very positive.

• The long and short term trends are both positive. This is looking good!
• Looking at the yearly performance, MCHP did better than 77% of all other stocks.
• MCHP is currently showing a bull flag pattern! A bull flag pattern occurs when prices pull back slightly after a strong rise up. This may be a nice opportunity for an entry.
• MCHP is part of the Semiconductors & Semiconductor Equipment industry. There are 104 other stocks in this industry, MCHP did better than 65% of them.
• MCHP is currently trading in the middle of its 52 week range. The S&P500 Index however is currently trading near new highs, so MCHP is lagging the market.

Our latest full technical report of MCHP contains the most current technical analsysis.

How does the Setup look for NASDAQ:MCHP

ChartMill takes into account not only the Technical Rating but also assigns a Setup Rating to each stock. This rating, on a scale of 0 to 10, reflects the degree of consolidation observed based on short-term technical indicators. Currently, NASDAQ:MCHP exhibits a 8 setup rating, indicating its consolidation status in recent days and weeks.

MCHP has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 84.34. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 81.76, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for MCHP in the last couple of days, which is a good sign. Very recently a Pocket Pivot signal was observed. This is another positive sign.

How can NASDAQ:MCHP be traded?

A breakout opportunity may arise when the stock surpasses the current consolidation zone and reaches new highs. Traders often wait for this breakout before considering buying the stock. To manage risk, a stop loss order could be placed below the consolidation zone to limit potential losses.

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents technical observations generated by automated analysis but does not guarantee any trading outcomes. Always trade responsibly and make independent judgments.

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

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.