Since its meteoric rise to over $13 a share late last year, Himax Technologies (NASDAQ: HIMX) fell steadily, finally bottoming at $6 on April 1, 2018. But the quiet rally that brought the stock to the 200 SMA (simple moving average) is coming to an end: HIMX stock closed down 6.86 percent on just a single day – June 15 – without any new news.
Bulls built a position in Himax ahead of the multiple investor conferences the company scheduled for the month. In July, the company will also pay out its annual dividend, reaffirming its confidence for sufficient cash flow to fund it and the company’s growth ambitions.
The seemingly inevitable completion of Qualcomm (NASDAQ: QCOM) buyout of NXP Semiconductors (NASDAQ: NXPI) indirectly helped give HIMX stock a lift. With Qualcomm, the company will launch a 3D sensing solution for Android suppliers. Though completing the sales complex because each manufacturer needs extra support and has a unique set of demands, investors like the pivot into this space, from VR and AR.
Virtual Reality and Augmented Reality are still longer-term growth markets for Himax. Facebook (NASDAQ: FB) cut prices for Oculus and Microsoft (NASDAQ: MSFT) is still developing the Hololens. Any revenue growth in this space adds to the fair value in HIMX stock. Until then, traders will buy Himax in the $6.00 to $7.25 range and sell the stock when it gets close to $9.00 a share.
Disclosure: Author owns shares of NXPI
