Texas Instruments: Standing Aside as I Await More Evidence

 | Mar 13, 2018 | 10:52 AM EDT
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We looked in on Texas Instruments Inc. (TXN) at the beginning of February where I wrote, "Longer-term holders of TXN have a lot of profits built up and you can never know when or why investors might want to nail down those profits. It is a risk that you probably cannot quantify. I continue to recommend that longs protect their positions." Our Point and Figure chart nailed the downside price target - "In this Point and Figure chart of TXN a possible downside price target of $97.12 is shown."

Prices have rallied back the past few weeks and the indicators have improved. Is this enough to sound the all-clear horn? Let's check.

In this daily bar chart of TXN, below, we can see that prices are above the rising 50-day moving average line and the rising 200-day line. The daily On-Balance-Volume (OBV) line has moved back to its January peak even though the volume pattern shows lower volume since early February. The trend-following Moving Average Convergence Divergence (MACD) oscillator just moved above the zero line for an outright go long signal.

In this weekly bar chart of TXN, below, we can see a mostly bullish picture. Prices are above the rising 40-week moving average line. The weekly OBV line shows an uptrend from 2015 but the January 2018 high has not been passed yet. The weekly MACD oscillator crossed to the downside in early February for a take profits sell signal. The two moving averages that make up this indicator have begun to narrow a little but a bullish crossover could be a few weeks away or not happen - it all depends on the price action.

In this Point and Figure chart of TXN, below, we can see a long rise going back to 2012. There is an upside price target of $139 but the chart needs to have a breakout at $122 to open the way.

Bottom line: Even though TXN has a higher price target from our Point and Figure chart, I also know that TXN has rallied nearly eight-fold from its 2009 nadir. Clearing the $115-$120 area from January may be difficult and I would prefer to stand aside for more evidence.

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