Ambarella, Inc. develops semiconductor processing solutions for video
that enable high-definition (HD) video capture, sharing, and display
worldwide. The company’s system-on-a-chip designs integrated HD video
processing, image processing, audio processing, and system functions
onto a single chip for delivering video and image quality,
differentiated functionality, and low power consumption. Its solutions
enable the creation of video content for wearable sports cameras,
automotive aftermarket cameras, professional and consumer Internet
Protocol (IP) security cameras, telepresence cameras, and unmanned
aerial vehicles in the camera market; and manage IP video traffic,
broadcast encoding and transcoding, and IP video delivery applications
in the infrastructure market.
Take a look at the 1-year chart of Ambarella (NASDAQ: AMBA) with the added notations:
AMBA started to trend higher back in December, and then the stock
really took off in May. Since that time, though, the stock has fallen
all the way back down to its $50 level. Over the past year, AMBA has
found support at that same $50 support (green) on multiple occasions.
Traders could expect some sort of bounce if the stock reaches that
support again. However, if the $50 support were to break, lower prices
should follow.
The Tale of the Tape: AMBA has an important level of
support at $50. A trader could enter a long position at $50 with a stop
placed under the level. If the stock were to break below the support a
short position could be entered instead.
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