Boston, MA 10/09/2013 (wallstreetpr) – RF Micro Devices, Inc. (NASDAQ:RFMD) (Closed: $5.88, Down: 0%) had made a large bullish candle on last Friday. It opened in the positive on Tuesday but soon traded all over the Friday range before settling exactly at the Monday closing price. The price action produced a Turning Top candle with long shadows on both sides, implying absolute indecision among the market participants before the quarterly results announcement. The volume at 8 million against an average of 5 million shows a lot of interest but no real domination by either bulls or bears as evident from the candle formation.
During the period of June – October 2012, the stock tested the $3.45 – $3.50 zone 4 times before launching a bear rally. This corrective rally from the 2012 bottom of $3.45 is perfectly contained in a rising channel till now and the price is trying to hit the upper boundary of the channel right now at $6.40, very close to the 2/3rd or 66.6% retracement level of the entire fall from the 2011 top of $7.89 to the 2012 bottom of $3.45. More immediate resistance comes from the upper boundary of the channel containing the price action from the March 2013 swing low of $4.30, currently at $6.15 and the 61.8% retracement level of the fall mentioned above, at $6.19. But the rejection from this resistance area would be confirmed only on a move below $5.55, the low of the last week.
The bulls would hope for a rally as the price has broken out of a Cup & Handle pattern when it traded above $5.75, the May 2013 swing high. As long as $5.55 is protected, the bulls can hope for the targets of this pattern to be achieved in $7.20.
The daily indicators are showing a lot of negative divergences, alerting the investors to a fast fall in case of a result below expectation.
