Investors Should Check Our Strategy for This Semiconductor Name
A significant semiconductor holding has been showing a bottom pattern but we've got a trading strategy for investors.
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ON Semiconductor ON has been trading sideways for much of the past year and it looks like a bottom pattern. Let's check out the usual collection of charts and indicators to plot a strategy.
In this daily bar chart of ON below, I can see that dips into the $65 to $60 area have been bought. Prices trade above the rising 50-day moving average line but below the slightly declining 200-day moving average line. The On-Balance-Volume (OBV) line declined into late April and then turned higher, telling me that traders of ON have shifted to being aggressive buyers from aggressive sellers. The Moving Average Convergence Divergence (MACD) oscillator has just edged back above the zero line for an outright buy signal.
In this weekly Japanese candlestick chart of ON below, I see a picture where ON rallied and then corrected to the downside. Prices are getting ready to launch another rally I believe. Prices are testing the declining 40-week moving average line and will hopefully make a couple of closes above it. The OBV line made a low in April and a higher low in June. The MACD oscillator has improved since April and is not far below the zero line now.
In this daily Point and Figure chart of ON below, I can see that the software is projecting a downside price target in the $57 area. A trade at $78 should refresh the uptrend.
In this second Point and Figure chart of ON below, I used weekly price data and here the upside breakout point at $78.
Bottom line strategy: Traders could probe the long side of ON on a shallow dip to $75 risking to $65 for now. Add to longs on strength above $78.
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