Tuesday, March 2, 2010

New Tech play

I was watching Howard Lindzon on Stocktwits.tv this morning and I really liked the chart he showed of SKWS. Lately I have been buying position in very weak technical patterns, i.e bottom picking. So here I am going to go long a strong chart. To be honest I do not know much about the company except from the below summary from Google finance:

Skyworks Solutions, Inc. (Skyworks) offers diverse standard and custom linear products supporting automotive, broadband, cellular infrastructure, energy management, industrial, medical, military and cellular handset applications. The Company’s portfolio includes amplifiers, attenuators, detectors, diodes, directional couplers, front-end modules, hybrids, infrastructure radio frequency (RF) subsystems, mixers/demodulators, phase shifters, power dividers/combiners, receivers, switches and technical ceramics. It has aligned the product portfolio around two markets: cellular handsets and analog semiconductors. The handset portfolio includes customized power amplifiers and front-end solutions, from entry level to multimedia platforms and smart phones. Its primary handset customers include LG Electronics, Motorola, Nokia, Samsung, Sony Ericsson, Research in Motion and HTC.

They have had rising sales and earnings which is a good sign. They also are in the IBD 100 list that came out over the weekend. They just made a 52 week high recently of 16.04 today and broke out of a multi-year resistance level on some nice volume. On top of that SWKS has made a 7 year high. Take a look at the daily chart below:

Here is the position that I am going to take:

I am going to by 10 May '10 17.50 calls to ride the momentum. They are currently trading at $0.50.

Entry: 15.85-16

Stop: A break below the breakout price at 15.40 plus some wiggle room, 15.25

Risk: $250-350 (1.5%-2% of portfolio)

Total Dollars in position: $500 (3% of porfolio)

Target: 18 or until the momentum fades.

Buy 10 May '10 17.50 calls @ limit $0.50, $500 total.

1 comment:

  1. I just got stopped out for a $160 loss. Less than expected, so that was nice. The breakout failed, oh well.