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CRUS is oversold within a bullish trend
Mean reversion trade: Cirrus Logic (CRUS)
Company Description Cirrus Logic, Inc. (CRUS) develops high-precision, analog and mixed-signal integrated circuits for a range of audio and energy markets.
Relative Strength The relative strength for Cirrus Logic is very positive. The shares of CRUS are up 119.94% as of Thursday’s close while the broad market as measured by the S&P 500 index is down 7.87%.
Short-Term Reversion to the Mean Data
- Stock: Cirrus Logic (CRUS)
- Price: 15.00
- Trend: Higher (based on the price in relation to the Ichimoku Clouds indicator)
- 2-day RSI: 4.96 (below 5 is oversold)
- Risk: 2% of account equity
- 20-day Average True Range (ATR): 0.990
- 1.5 times ATR: 1.49
- 3 times ATR: 2.97
- Target price: 17.97 (three times ATR plus the current price of 15.00)
- Stop loss: 13.52 (current price of 15.00 minus 1.5 times ATR)
- Position size: 20.20% (2% of equity risk divided by the 1.5 times ATR times the price)
Friday's Trading Strategy
Buy HWD at 15.00 with a target price of 17.97 and an initial trailing stop of 13.52. If the stock moves higher but has not reached the target price, the stop loss should be raised beneath the highest closing price.
Other recent mean reversion articles: Harry Winston (HWD), SanDisk (SNDK), Shiloh Industries (SHLO), US Airways (LCC), Mariner Energy (ME), Valassis Communications (VCI), UAL Corp (UAUA)
For more information on this strategy and other profitable trading and investing strategies visit Grail Investing at grailinvesting.com.
Note: All articles are for educational purposes only. This information should not be interpreted as a recommendation to purchase, sell or hold any security at any time. Always consult with an investment advisor familiar with your financial goals before making any investment or trading decisions.
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