I've Got a Target for Mobileye Global
After Intel put down rumors that it was looking to sell its stake, I see an opportunity opening up.
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I didn’t have China kicking off a Q4 rally in the U.S. markets on my bingo card, but here we are.
Technically, we haven’t reached the fourth quarter yet, but don’t be surprised to see a bit of end-of-the-month tape painting today and Monday.
That being said, I don’t want to get ahead of myself. The iShares Russell 2000 ETF IWM has closed lower six days in a row. Energy can’t catch a bid to save its life and real estate may be topped out in the near term.
The S&P 500, technology and industrials will likely continue to lead in October. Although we aren’t a Nvidia NVDA-led market anymore — the stock and the semiconductor index have both strengthened again and appear on the verge of a breakout.
Looking away from strength and new highs, Mobileye Global MBLY caught my attention. Last week, Intel INTC put down the rumors that it was looking to sell its stake in the company. That has been a major overhang for Mobileye bulls, given Intel’s 88% stake. I wouldn’t automatically assume Intel won’t sell anything over the next year, but the company made it sound like they are committed to Mobileye.
The recent price action has created a bullish inverse head-and-shoulders pattern. Thursday's surge pushed the price above resistance that began back in late July. The price target for the pattern measures to $16.50, but there’s also an open gap to $20.
I see $16.50 as resistance and the first target. If shares push to that level, I would take a portion of the position off the table and look for the move to $20 to capture the rest of the trade. If long, I would use the 10-day exponential moving average (EMA) as a stop loss.
At the time of publication, Byrne had no positions in any securities mentioned.
