Who’s Afraid of Wolfson?

I suppose when you hear or read that any company is a possible takeover target for Apple (AAPL) you should run a mile as with Apple’s firepower, pretty much the whole world could be bought! You are also probably finding out just when the smart money has already been involved, turned a profit and is looking for the exit. But in such situations it is always worth just checking to see whether the technicals back the story. I believe that in the case of Wolfson they just might. 

Here’s the technical scorecard – 

1. We have an unfilled gap through the 20 day moving average today.
2. The latest support actually came in fractionally above the 200 day moving average – a strong buy signal.
3. October has delivered a bear trap rebound back above the last September 195p intraday low – a buy signal.
4. There is bullish divergence in the RSI window.

Normally 2 points is enough to deliver a winning trade, 3 or more should do the trick as far as there being a high probability of success. We shall see…  The May price channel top target is 250p over the next 2-4 weeks. Only back below the gap floor at 201p would really question the bull scenario.

Zak Mir