Semiconductors have been one of the hottest areas of the market off the August low and especially during the month of October. That's created a number of trading opportunities in the space. I would consider Microsemi Corp to be one of those opportunities now based on its cup with handle breakout on heavy volume Friday. Volume trends have been strong on MSCC throughout 2015. A breakout and strong first quarter was followed by a negative divergence on its weekly chart in the second quarter. That resulted in selling during the summer months and a reset of its weekly MACD at centerline support. MSCC's latest rise printed the right side of a cup and after two weeks of consolidation (handle), it's broken out again with a measurement to 46.00. The distance from the top of the cup (37.00) to the bottom of the cup (28.00) represents the measurement (9.00) that you add to the breakout level (37.00). That provides a target of 46.00 in time. Here's the chart:
At the bottom of the chart, you can see that the semiconductor index (DJUSSC) has been outperforming the S&P 500 once again while MSCC has been an excellent performer among its peers throughout 2015. I'd expect this to continue based on the strong technical conditions in play.
Happy trading!
Tom
