GlobalFoundries deal with US gov't furthers case for silicon buildout: Wedbush
News that GlobalFoundries strengthened silicon build-out cases through a contract with the U.S. government provides positive momentum for semiconductor infrastructure expansion.
Based on RSI 9.3's extreme oversold zone accompanied by increased volume and a premarket rebound of 3.7%, I considered entering at the early stage of the rebound. Between resistance 50.00 and support 45.00, since the moving averages are misaligned, I judge conservatively while confirming contrarian support near the support line.
The upward trend in the oversold zone continues, and upon reaching the resistance line, I will take profit at $49.5. If the support line is broken, I will cut losses at $44.5 for risk management. An oversold zone (RSI 9.3) accompanied by increased trading volume and a premarket rebound (3.7%) has appeared, but since the moving averages are not aligned, a conservative approach is necessary, so I will respond based on technical grounds.
Technical indicators at the entry point indicate an RSI(14) of 9.3, signaling a severe oversold condition, with the moving averages misaligned. Trading volume rose to 1.67 times the 20-day average, and the 7-day rate of change recorded -17.1%.
Initially, based on RSI 9.3 extreme oversold conditions and 1.67x volume increase compared to the 20-day average, I anticipated a conservative rebound and aimed for a 2.5% return. However, the actual result recorded a 10.9% rise, resulting in an OVERHIT. Along with news of a contract with the U.S. government and overlapping earnings expectations, the strong reversal of the downward trend was not sufficiently reflected, and the target price was set too conservatively.
Through this trade, I learned that in extreme oversold (RSI 9.3) and volume-accompanied rebound phases, it is necessary to factor in the impact of positive news more flexibly when setting target prices. Going forward, in similar oversold intervals, I will flexibly adjust take-profit criteria by considering not only technical rebounds near support levels but also the continuity of strong momentum, such as theme news inflow trends and government support.