EOT Trade Alert – December 18, 2015

| December 18, 2015

Trade Alert:

Buy IPHI January 15th 2016 $30.00 calls at $1.00 or better


Company Background:

Inphi (IPHI) provides high-speed analog and mixed signal semiconductor solutions for the communications, datacenter, and computing markets worldwide. Its analog and mixed signal semiconductor solutions offer high signal integrity at data speeds while reducing system power consumption.


Short-Term Catalyst:

The “Internet of Things” (IoT) is the network of physical objects with embedded electronics like software, sensors, and connectivity to the internet.  This enables the objects to collect and exchange data.

The Internet of Things allows objects to be sensed and controlled remotely across existing network infrastructure.  This creates opportunities for more direct integration between the physical world and computer-based systems.

IoT is one of the most talked-about trends in business and is a disruptive technology that is changing the way companies do business and the way people live their lives.

The expansion of IoT is predicted to accelerate over the next decade as the number of connected things grows and the amount of data mushrooms.

All of that data is called ‘BIG DATA’.  Inphi moves big data – fast, in the long haul market, metro market, and data center. As they put it, “we are the FedEx $FDX of digital data.”

Inphi has a three-year earnings growth rate of 121%.  But annual profits have fluctuated during the past few years.

What’s more, the recent price action and technical indicators are flashing a big – Buy Now – signal.

The stock’s in a bullish uptrend.  It’s above the 200-day moving average.  There is also technical support at $26.00… the site of the June high and the October breakout.  The RSI is 37, indicating the stock is oversold and due for a bounce.

Let’s grab call options on this stock to profit from the next leg higher. 

But keep in mind the options are thinly traded and our buying activity could move the option price in the short term… so, don’t chase this option above the buy up to price.


Trade Details:

Underlying Stock Symbol: IPHI
Current Bid-Ask Price: $0.45- $0.70
Option “Buy Up To” Price: $1.00
Break-Even On Stock At Expiration: $31.00
Maximum Risk Per Contract: $100.00


Exit Strategy:

IPHI is trading at $27.37 per share.  Resistance levels will be at $32.00 and $34.00.  Remember, we want this stock to move higher.  Support levels will be at $26.00 and $24.00. Conservative investors should look to exit at the first support or resistance level. Aggressive investors may want to hold for a bigger move.





Category: EOT Trade Alert

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