Microchip Technology (MCHP) shares could remain on watchlists after tumbling Thursday to lead chip stocks lower during a broad post-rally 澳洲幸运5官方开奖结果体彩网:sell-off for U.S. equities. 

Chip stocks such as Microchip, which makes silicon used in everything from consumer electronics to automotive systems, have remained particularly volatile against a backdrop of 澳洲幸运5官方开奖结果体彩网:tariff uncertainty that has weighed heavily on 澳洲幸运5官方开奖结果体彩网:consumer and business confidence, both key cu꧟stomers that drive chipm💮akers’ earnings.

Microchip shares gave back about half of the previous session's record gains on Thursday, falling 14% to $38.81. Since the start of the year, the stock has lost around a third of its value, compared to the 澳洲幸运5官方开奖结果体彩网:Nasdaq Composite's 15% drop over the same period.

Below, we analyze the 澳洲幸运5官方开奖结果体彩网:technicals on Microchip’s 澳洲幸运5官方开奖结果体彩网:weekly chart and identify important price levels that investors may be watching out fo💃r.

Price Swings Continue

Selling in Microchip shares has accelerated after the 50-week moving average (MA) crossed below the 200-week MA in early March to form a 澳洲幸运5官方开奖结果体彩网:death cross, a chart pattern that signals lower prices.

More recently, the stock’s 澳洲幸运5官方开奖结果体彩网:volatility has increased significantly since last week’s tariff-induced 25% sell-off, with 澳洲幸运5官方开奖结果体彩网:sizeable swings in both directions. Importantly, this week’s price gyrations have occurred on the highest 澳洲幸运5官方开奖结果体彩网:trading volume since Feb🔥ruary 2017 as investors take bets on the൩ chipmaker’s next move.

Meanwhile, the 澳洲幸运5官方开奖结果体彩网:relative strength index confirms bearish price momentum, though the indicator remains in oversold territory, potentially attracting 澳洲幸运5官方开奖结果体彩网:short covering and 澳洲幸运5官方开奖结果体彩网:buy-a-bounce investors.

Let’s apply t澳洲幸运5官方开奖结果体彩网:echnical analysis to identify important 澳洲幸运5官方开奖结果体彩网:support and resistance levels on Microchip’s chart.

Important Support Levels to Watch

The first lower level to watch sits around $34. This area on the chart would likely attract significant attention near this week’s low, which also closely aligns with the December 2018 trough. A bounce here could indicate the completion of an 澳洲幸运5官方开奖结果体彩网:Elliot Wave pattern with five price swings.

A 澳洲幸运5官方开奖结果体彩网:breakdown below this area could see the shares revisit lower support at the 澳洲幸运5官方开奖结果体彩网:psychological $30 level. Bargain hunters may be on the lookout for 澳洲幸运5官方开奖结果体彩网:buy-and-hold opportunities in this location near the October 2018 澳洲幸运5官方开奖结果体彩网:swing low and March 2020 pandemic trough.

Key Resistance Levels to Monitor

Upon further upswings, investors should keep tabs on the $50 level. Tactical traders who bought at lower prices may decide to 澳洲幸运5官方开奖结果体彩网:lock in profits in this region near a trendline that connects the Februar𒆙y low with a range of corresponding tradin🤪g activity on the chart between April 2019 and September 2020.

Finally, buying above this level could see Microchip shares climb to around $56. This area on the chart would likely provide overhead resistance near multiple 澳洲幸运5官方开奖结果体彩网:peaks and troughs on the chart stretching back to early 2020.

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As of the date this article was written, the author does not own any of the above securities.