After a rebound without fundamental improvements, the security might have a new bearish trend toward the USD 10.60 support area.

From a fundamental viewpoint, the group which produces and designs embedded hardware, has not sufficient quality to hope for a continuation of its bullish trend. Indeed, Surperformance rating largely punishes Freescale Semiconductor because of its lack of visibility. The deterioration of the financial situation and the increasing leverage for the two next fiscal year emphasize risks. Net Debt/EBITDA ratio at 5.46 should become worst next year at 7.43.

Technically, the security had a technical rebound but there is still a bearish trend in the long-term. The bullish impetus should be stopped in the coming trading sessions. Thanks to it, the security has reached USD 12.1 resistance. 20-day moving average has been broken but the stock should return toward USD 10.6.

Therefore, fragile fundamentals and technical pattern let see a downside potential. Investors can take a short position close to the USD 12.1 resistance area and aim a return in the USD 10.6 support area. A stop loss will be fixed above USD 12.1 because a breakout of this threshold would invalidate this trading strategy.