Key Takeaways
- Arm Holdings shares will likely remain on investors’ radar screens after surging 16% Wednesday following news that the chip design company will be a technology partner in the $500 billion Stargate AI Infrastructure project
- The stock broke out from a six-month symmetrical triangle on Tuesday, with gains accelerating today, potentially paving the way for further upside.
- Investors should watch key overhead areas on Arm’s chart around $187 and $245, while also monitoring a major support level near $150.
Arm Holdings (ARM) shares will likely remain on investors’ radar screens after surging 16% Wednesday following news that the chip design company will be a technology partner in the $500 billion artificial intelligence (AI) Infrastructure project announced this week by the Trump administration.
Investors see the Stargate project as a significant win for Arm, which is majority-owned by Japan’s SoftBank (SFTBY) and a partner with enterprise software giant Oracle (ORCL), two of the companies leading the project along with ChatGPT maker OpenAI.
Arm shares have gained 46% since the start of the year and more than doubled over the past 12 months, boosted by increasing royalties it generates from chip designs amid booming demand for the computing needed to power AI infrastructure and applications. The stock closed at just below $180 on Wednesday, its highest level since July.
Below, we break down the technicals on Arm’s chart and identify key price levels to watch out for.
Symmetrical Triangle Breakout
Arm shares broke out from a six-month symmetrical triangle on Tuesday, with gains accelerating today, potentially paving the way for further upside.
Importantly, Wednesday’s pop was backed by the highest volume since the stock’s early-August sell-off, indicating institutional investors participated in the move higher.
While the relative strength index (RSI) confirms bullish price momentum with a reading above the 70 threshold, the indicator also flags overbought conditions that could lead to short-term price fluctuations.
Let’s identify key overhead areas on Arm’s chart to watch and also point out a major support level that could come into focus during declines.
Key Overhead Areas to Watch
The first important overhead level to watch sits around $187. This area, just 4% above Wednesday’s closing price, will likely gain significant attention near the stock’s prominent July peak and record high.
If the stock moves into price discovery, investors can project an upside target using the measured move technique, also known by chart watchers as the measuring principle.
When applying the analysis to Arm’s chart, we calculate the distance between the symmetrical triangle’s two trendlines near the start of the pattern and add that amount to this week’s breakout point. For instance, we add $95 to $150, which forecasts a target of $245, a region where investors may decide to lock in profits.
Major Support Level to Monitor
Finally, during pullbacks in the stock, investors should keep a close eye on the $150 level. Investors may look for retracement entries in this location near the initial breakout area, which may flip from a place of prior resistance into future support.
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As of the date this article was written, the author does not own any of the above securities.