Hitched to Big Tech, Texas Instruments Is Heading South
Let's check out the charts and indicators of the semiconductor manufacturer.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
Semiconductor maker Texas Instruments TXN "designs, manufactures, tests and sells analog and embedded processing chips.'' Share prices made a high in July as the company reported their latest earnings figures but in recent days the direction has changed.
Let's check out the charts and indicators.
In the daily bar chart of TXN, below, I can see that prices closed below the 50-day moving average line on Thursday. The 50-day line is cresting.
The On-Balance-Volume (OBV) line has rolled over and turned lower in July suggesting a shift from aggressive buying to aggressive selling. The Moving Average Convergence Divergence (MACD) oscillator turned lower in late May and is now very close to the zero line and thus close to a sell signal from this trend-following indicator.
In the weekly Japanese candlestick chart of TXN, below, I can see a vulnerable setup. In recent weeks the candles show us upper shadows and large red (bearish) candles. Weakness under $190 will put a lot of traders at a loss and likely precipitate further selling.
The weekly OBV line has chopped higher since December but it has not kept up with the price gains and is a bearish divergence. The MACD oscillator has been narrowing in recent weeks and is close to a bearish crossover.
In this daily Point and Figure chart of TXN, below, I can see that the software is projecting a potential downside price target in the $177 area.
In this weekly Point and Figure chart of TXN, below, I can see that the software is still giving us a bullish price target. A weekly close at $189.74 or lower should generate a downside price target.
Bottom-line strategy: TXN did not get as extended as some other technology names but there's an old saying on Wall Street that goes "When they raid the house they take all the ladies." This off-color saying implies that when a big selloff happens every stock gets hit. The downside price target for TXN is not that terrible but in this current market environment a deeper selloff could happen. Keep your powder dry.
Employees of TheStreet are prohibited from trading individual securities.