Rubicon Technology, Inc. (RBCN)
Rubicon Technology, Inc. develops, manufactures, and sells monocrystalline sapphire and other crystalline products for light-emitting diodes, radio frequency integrated circuits, blue laser
diodes, optoelectronics, and other optical applications. It fabricates its products from the boules and sells them in various categories, including core, as-cut, as-ground, and polished. The company manufactures sapphire substrates and optical windows, such as two to four inch sapphire cores and wafers for use in LEDs and blue laser diodes for solid state lighting and electronic applications. This also offers us a nice trading oportunity at present.
We have a classic Head & Shoulders reversal role playing out here. A Head and Shoulders reversal pattern forms after an uptrend, and its completion marks a trend reversal. The pattern contains three successive peaks with the middle peak (head) being the highest and the two outside peaks (shoulders) being low and roughly equal. The reaction lows of each peak can be connected to form support, or a neckline.
The head and shoulders pattern is one of the most common reversal formations. It is important to remember that it occurs after an uptrend and usually marks a major trend reversal when complete. While it is preferable that the left and right shoulders be symmetrical, it is not an absolute requirement. But here we have alrady broken neckline and we have continued to rise to test necline before we continue fall. We are in a perfect postion for a bearish Option Play. Even a nice little spread might work here.
Buy a November 20 at $.65 and sell a 17.50 at $.15
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