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| Gator's Chart of the Day: CRUS |
Cirrus Logic spent all of may in a fairly tight range as it consolidated a big two day move. Once the stock and the 50 day simple moving average found each other the price firmed and began working higher. Tuesday it popped above the upper Bollinger band making a 7% move on volume that was 70% higher than the 50 day average.
Although the stock is clearly extended above the 200 day (green line in the bottom corner of the price section) the forward P/E is only 13x. They have no debt and a price target near 34. I think it's too late to buy aggressively but a trading plan that includes one buy at a lower level could be initiated here. The add would be on a bounce from a retest of the breakout. The stop on the initial buy would be back in consolidation and would be nearly 10% below Tuesday's close so it's necessary that a buy here be small.