CYPRESS Semiconductor: NASDAQ (CY)

Spansion Inc. – NYSE: CODE

Chart Pattern: Was consistently running within the range before the M&A news (See chart)

RSI: Currently above 70% - overbought level. MA Bullish-crossover. MA20 crossed both

MA50 and MA100 MACD: Strong uptrend since Oct-14. Showing

strong uptrend momentum.

VSA: In 2014, whenever there is elliot wave down trend, it’s usually accompanied by a low volume, while right after of these downtrend ended, there will be a huge spinning candles with high volume Suspect involvement of BBs.

Chart Pattern: Generally been on uptrend since 2013.

RSI: Currently above 70% - overbought level. MA Bullish-crossover. MA20 crossed both

MA50 and MA100 MACD: Strong uptrend since Oct-14. Showing

strong uptrend momentum.

VSA POV: Huge buying pressure for the last 2 days. Opposite from CY, their downtrends in 2014 is usually accompanied by huge volume with bearish candles.

Incomes:

Sterne Agee: With Cypress in the driver’s seat CEO TJ Rodgers rolls out a

long-term roadmap If the company can pull the deal synergies ($135 million) to

year 2, the combination could drive roughly $1.50 in earnings per share (EPS) and an over $18 valuation.

The companies have a 45% to 55% market overlap, and Cypress can drive a better scale of combined businesses with cost reductions in selling and administrative expenses, which in turn would drive synergies

Other analysts made calls on the merger as well: Pacific Crest upgraded shares from Sector Perform to Outperform with a

price target of $15, also saying the deal gives it needed operational scale with consolidated revenue of over $2 billion.

J.P. Morgan cautions that the merger could take a full three years for the company to realize some of the $135 million in cost synergies they predict.

Topeka Capital Markets raised shares from a Hold rating to Buy with a price target of $13.

S&P Capital IQ raised its rating to Buy from Hold and raised its target price to $15, because it sees significant scale and complementary product offerings and opportunities in the areas like automotive and industrial. The firm positively views the $135 million in potential annual synergies and expects Cypress to benefit from a lower cost manufacturing footprint. The deal is seen closing in the second quarter and the annual dividend is considered safe despite the higher share count after the deal.

Recommend: Buy

Entry Point: $11.66 (Waiting for retracement) Entry Point 2: $13.14 (2013 Highs) Stop Loss: $10.73 (Price level before the gap-

up)

Caution: December Effect

Merger would be more likely to finish mid 2015

Cost- synergies effect could take about 3 years to realize.

Thank you for your attention.