Ambarella (AMBA) faces tough resistance after a surge to $46 following solid FQ1 results. The maker of HD video compression chips has made the transition away from reliance on GoPro (GPRO), but the company now faces customers with a shortage of image sensors from Sony (SNE) due to the April earthquake that shut down the factory. The stock has struggled at $46 while the recent lows around $36 formed a double bottom. At this point, I'm looking at a return to $41 before buying as FQ3 results are highly dependent on supply of image sensors. Too much uncertainty exists for a breakout at this point though expectations are starting to build that FY18 will return to solid growth. Disclosure: No position