Semiconductor Sell-Off Could be Good News for This Chip Stock

CY stock could be flashing 'buy,' if past is prologue

Managing Editor
Aug 17, 2018 at 12:10 PM
facebook X logo linkedin

Chip stock Cypress Semiconductor Corporation (NASDAQ:CY) is down 0.6% at $15.84 in afternoon trading, falling alongside sector peers Nvidia (NVDA) and Applied Materials (AMAT) in today's semiconductor sell-off. Shares of CY have pulled back since their post-earnings high in late July, but according to Schaeffer's Senior Quantitative Analyst Rocky White, now may be the time to buy the dip on this semiconductor. 

Longer-term, Cypress stock has spent most of the past year bouncing between support in the $14.50-$15.50 area -- home to its year-to-date breakeven -- and resistance in the $17.50-$18.50 region. Further, the last few pullbacks have been contained by CY's 320-day moving average.

Daily Chart of CY with 320MA

Cypress stock is now within one standard deviation of its 320-day moving average, after a lengthy stretch above this trendline. There have been four similar pullbacks for CY in the past, after which the stock went on to average a one-month gain of 9.9%, boasting a 100% win rate, per White. A move of this magnitude would put the chip stock above $17.40.

Plus, now may be a good time for near-term traders to jump onto Cypress stock with options. This is per the semiconductor's Schaeffer's Volatility Index (SVI) of 32%, which ranks in the low 22nd percentile of its annual range. In other words, muted volatility expectations have been priced into short-term CY options.


Unlock Weekend Profits with Chris Prybal's Favorite Strategy Up +487.5% in 2024

With the markets going left, right, and sideways, you need to have a plan now more than ever. 

Expert Trader Chris Prybal is no stranger to volatility, and has mastered finding big stock rallies while other traders aren't looking over the weekend. Rallies that produced gains like +207% on RTX calls, +236% on MARA calls, and +238% on NET calls.

A few simple moves on Sunday at 7pm could be the “Secret Sauce” your portfolio needs to not just stay afloat, but make unprecedented gains in this turbulent market.

Don’t sit on the sidelines, beat the market with Chris Prybal's strategy. Join him now!