Chart Analysis: "If I have seen further it is by standing on the shoulders of giants" – Isaac Newton. Today's NinjaTrader and Mr. TopStep chart of the day is exploring the idea of leaping onto the shoulder of a successful investor with the intention of seeing further into the price movement of RF Micro Devices ($RFMD). At the time of writing this article, $RFMD is trading up 7% over yesterday's close and reached as high as 10%. Today's spike can be attributed to news that Barclay's Capital upgraded the stock to Overweight and also the disclosure that Paul Tudor Jones' investment company Tudor Investment announced a new long position in $RFMD.
Paul Tudor Jones made his fortune of over $3.3 billion through the management of several hedge funds where he can charge higher fees due to his success. He is also famous for calling the 1987 stock market crash live where he more than tripled his money. It will be a large leap to ascend to this giant's shoulders, however public disclosure of his $RFMD position makes this challenge much less daunting.
We now turn to the daily chart of $RFMD where we apply several powerful features of the free NinjaTrader 7 platform. The Fibonacci drawing tool is used to measure the price fall this year from highs just below $8/share down to about $3.50/share where some support has been found. The BollingerBandTripleState indicator, a free indicator found on the NinjaTrader Support Forum, is then applied to the chart allowing us to easily see where the market is expanding and contracting with color cues. The blue indicates volatility is within the standard deviation, the red shows larger volatility and the yellow shows less volatility with price contraction. The chart shows the last few months have been mostly a consolidation period with on red area in November where price jumped up quickly. Price has been stuck below the $4.50 area until today's breakthrough to the upside. Lastly, the BollingerBandTripleState indicator is also displayed in a separate panel below price for those traders who would prefer to keep their price chart clean and refer to the state of the indicator below.
$RFMD is showing an increasing number of reasons to own the stock including our giant, Paul Tudor Jones' interest, improving fundamentals, upgrades and finally technical's as price begins trending to the upside. Savvy investors may be waiting for a pullback to hopefully enter into the beginning of a new bullish trend for $RFMD.
Today's chart can be created for free using the NinjaTrader 7 software powered with free end of day data from Kinetick.
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