MXL is a small-cap semiconductor name that we've been tracking for a few months. Semiconductors have been one of the strongest performing industries over the past three months, putting up over 20% since the beginning of the year. This trade idea looks to take advantage of underlying strength in the industry.
The 120m chart of MXL shows a strong rally from the stock's swing low around $15 to current levels. We're counting the rally as an impulsive sequence higher, with MXL in the middle of an extended Wave 3 surge. The simultaneous breakout of the prior corrective trend channel as well as the shorter-term impulsive trend channel occurred on strong momentum and is showing good follow through after retesting the topside of the channel.
We're looking for MXL to continue higher in Wave 5 of larger degree Wave 3, ultimately setting up for a push to new all-time highs above $32.25. Initiating a long position at market with a plan to hold for at least 20-25% return.
The 120m chart of MXL shows a strong rally from the stock's swing low around $15 to current levels. We're counting the rally as an impulsive sequence higher, with MXL in the middle of an extended Wave 3 surge. The simultaneous breakout of the prior corrective trend channel as well as the shorter-term impulsive trend channel occurred on strong momentum and is showing good follow through after retesting the topside of the channel.
We're looking for MXL to continue higher in Wave 5 of larger degree Wave 3, ultimately setting up for a push to new all-time highs above $32.25. Initiating a long position at market with a plan to hold for at least 20-25% return.