Last week I posted a very bullish technical read on AMBA, with a thesis that the high short float and the bullish looking price action was ready to take this one higher. Earlier this week, we got an upgrade from Morgan Stanley that started the ball rolling.
Looking at the Chart from finviz we can see that it broke the downtrend and is sitting above it. We we see the high short float and the Morgan Stanley Upgrade. All good things for a trader taking a contrarian position.
I still think this thing goes higher. My original price target was $54 based on the 161.8 Fib. To see that, please see my inital post.
Looking at current price action on the 30 minute chart, we notice the mini Bullish Inverse H&S pattern completed it’s target at 44.05 adn the previous gap was filled. From that point the stock is consolidating and appears to be forming a cup/handle for a move into 53. The target calculations are on the chart below.
I continue to like this one a lot. As far as risks, I would like to see those two VWAP lines hold. This is the Volume weighted average price from the two prior swing lows. It tells us how much the average buyer paid since that low. When the average buyer starts to lose money, they start capitulating, so we want to see buyers step in at those levels, showing us a desire to buy more and not lose confidence in the trade. We can also watch the 8 and 21 EMA shown on the 2nd chart below. The 8 is above the 21 and both are now trending up. We want this to continue.