A quick update on our existing ideas, Linde PLC (LIN) and Silvergate Capital (SI) are showing signs of upside exhaustion per the DeMARK Indicators after strong runs, so we would consider reducing exposure. Also, Verizon Communications (VZ) has taken out our recommended stop-loss level of $52.25, so we would close out longs.
MACOM Technology Solutions (MTSI) is our newest long idea - it is a ~$4B market-cap semiconductor stock that is poised to advance from its corrective phase along with many of its peers…
MTSI just cleared its 50-day (~10-week) moving average on improved short-term momentum following a three-month correction within its long-term uptrend defined by the weekly cloud model (the shaded area on the chart).
An oversold upturn has developed in the weekly stochastics, now above 20%, supporting the relief rally for the coming weeks. At the same time, there has been a notable loss of intermediate-term downside momentum near support.
We recommend keeping tight stop-losses to manage risk associated with the broad-based loss of momentum. For MTSI, we do not want to see it fall back below $56.50. Resistance around $71.80 can be used as an objective.
MACOM Technology Solutions (MTSI, $61.78):
Target: $71.80
Stop-Loss: $56.50