Monday, 23 November 2015

CREE - lights back on?

Whilst the broader equity market saw a day of chop/moderate weakness, there was notable strength in Cree (CREE), which settled +2.3% @ $26.26 (intra high 26.56). Cree looks headed for the 200dma in the $29/30 zone. The monthly candle is offering a key multi-year floor, with first target upside to $39/40 by late spring 2016.

CREE, daily

CREE, monthly


*it is highly notable that at the current rate of incline, the monthly MACD (green bar histogram) cycle will see a bullish cross in 2-3 months.. certainly by the start of March.

The world of electrical lighting has changed massively across the last few decades.

Incandescents are largely now gone, and even fluorescent tech is being entirely replaced by LEDs. LED technology itself continues to evolve, and despite some problems (LEDs not lasting as long as initially expected), further progress is inevitable.

CREE currently lacks a PE due to recent losses. Next earnings in January will be important to show the company is prepared for the longer term.. in what is a pretty competitive industry.

*I am long CREE (short term hold), seeking an initial exit in the 29/30 zone. If I exit within a few weeks, I will look to pick up a longer term strategic position on any pull back, and look to hold until April/May of next year.