Zarlink Semiconductors Could Run to $2.50

Jul 28th, 2010 – Comment

If ZL can breakthrough $1.95 convincingly it will have an easy run to $2.50 where it will meet much stronger resistance.


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zarlink

Hey Lou,

Zarlink reports  in a few days, waiting for a spike?? Long time
holder, whats your view 6 months – 1 year.

Erika

 

Hi Erika,

Zarlink Semiconductors Inc. ( ZL TSX) has had a spectacular run from the March 2009 lows when it traded below $0.26. Investors who caught the lows are looking at robust return of over 650%. Sweet! However lets keep in mind that the shares traded above $30.00 before the tech wreck of 200o and hasn’t been anywhere close to those prices ever since.

Your time frame for the stock of six to twelve months has some resistance points you need to watch.

 

 

zl

The three year chart provides a good view of the advance and the golden cross in place since June of 2009 when ZL traded at $0.40. The stock has found good support along the 50 day moving average and has tested it many times over the last eighteen months.  ZL reached the highs of $1.95  where it met some  resistance in March of 201o.The stock began a pullback at that point  until it found support at $1.40 and is currently retesting resistance at $1.95.

 

 

 

 

 

 

 

 

zl2

The six month chart illustrates the retreat from resistance at $1.95 in late March of 2010 and the sell signal generated by the MACD in early March. The RSI indicated an overbought situation that had developed in February suggesting that momentum buying was peaking and that investors who had warmed to some tidy profits should consider doing a D.B. Cooper and hitting the silk with a bag of cash.

To your question regarding the next twelve months watch the Q1 report scheduled for release Thursday July, 29, 2010. In the last reported quarter the stock got a nice pop on a beat of forecast. Keep in mind that ZL doesn’t have many analyst following it so that the consensus estimate of earnings will be influenced by the smaller sample size.

If ZL can breakthrough $1.95 convincingly it will have an easy run to $2.50 where it will meet much stronger resistance. As far as getting back up to the $30.00 range – good luck with that!

 

Happy Capitalism!

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