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Fan Yang

Mobileye (MBLY) - Watch Out for Resistance at 34-36

This week we got better-than-expected earnings report from Mobileye (MBLY).
MBLY: great results

As it comes off a record low of 23.60 since it IPOed in 2014, we should watch for resistance in the 34-36 area. 

MBLY Daily Chart 2/26

(click to enlarge)

As we can see in the daily chart, this weeks earnings report is helping MBLY round out a price bottom above 24. Now, as price approaches 34-36, it will be challenged by a falling trendline as well as a previous support pivot. Even around 33, price will be challenged by the 50-day SMA. Furthermore, the daily RSI is approaching 60 and if the bearish momentum were to remain intact, we should see the RSI turn down from around 60. 

Now, if price breaks above 36, and the daily RSI pushes above 70, we might be looking at a bullish reversal. For now however, I don't want to get too excited about the earnings numbers and the bullish prospect. BUT, if price does fall back near 25, I wouldn't mind going long because of good reward to risk. Let's say I can get in at 25 with a stop at 22.50, a target of just 30 would give a 2:1 reward to risk profile. I would set one target at 30, and another at 35. 

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