In today’s edition of the Daily Stock Report, we are going to highlight Monolithic Power Systems Inc. (MPWR). This is the first time we have discussed MPWR in our commentaries. Monolithic Power Systems entered the Favored Zone in the SIA S&P 500 Index Report earlier this year on May 13th, when the price was $737.73. MPWR shares have continued to remain strong and have consistently moved up the rankings in the SIA S&P 500 Index Report; rising 12 spots in the last day, 29 spots in the last week, 7 spots in the last month, and a whooping 173 spots in the last quarter. Currently the shares reside in the #83 spot in the report with a closing price yesterday of $830.63. This represents an increase of 12.6% since its entry in the favored zone. This is another example of staying in investments in the green favored zone which reinforces SIA’s methodology of finding and staying with the winners exhibiting strong relative strength.
In looking at the attached candlestick chart of MPWR, we see the shares were in a 2 year uptrend from October 2022 to October 2024, where the shares exhibited a consistent pattern of higher highs and higher lows albeit with very volatile gyrations in the process which can be typical in Technology names. Then, the bears took over in October 2024, when the shares peaked at the $950.00 area and the bottom fell out until MPWR finally hit a floor at approximately $450.00 in April of this year.
A very strong uptrend has re-asserted itself since April and the shares seem poised to challenge the $950.00 all time high which currently looks to be resistance. However, lets examine the Point and Figure chart to identify more precise resistance and support levels.
In the Point and Figure chart at a 2% scale, we can see the more precise area to watch for. To the upside – should the shares continue to show strength – resistance will be at $896.24 and, above that, the all-time high of $951.10. The shares are currently in a strong column of X’s lasting 10 boxes without a pullback. Therefore, if the shares pause to digest their gains of late, support is at its 3-box reversal of $764.93 and below that, $735.23. At time of writing the shares do seem to wish to pause and consolidate gains, so it will be important to watch to see if the shares can hold these support levels at the close, which may offer a better entry point for those wishing to gain exposure to the name. MPWR currently exhibits a bullish spread double top pattern and with an SMAX score of 10 out of 10. The shares are exhibiting strong near-term strength against the asset classes against a positive sector backdrop as the Electronics and Semi-Conductor space is also classified as a favored sector within SIA’s Market Sector report.
Monolithic Power Systems is an analog and mixed-signal chipmaker, specializing in power management solutions. The firm's mission is to reduce total energy consumption in end systems, and it serves the computing, automotive, industrial, communications, and consumer end markets. Monolithic Power uses a fabless manufacturing model, partnering with third-party chip foundries to host its proprietary BCD process technology.
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