Xilinx (XLNX) made a deep and swift correction to the downside in January and February but prices came roaring back and briefly made new highs for the move up. Is the stage set for sustained new highs or has the resolve of longer-term investors been weakened? Let's dig into the charts and indicators for some guidance.
In this daily bar chart of XLNX, below, we can that prices have struggled the past six months with rallies and sell-offs whipsawing traders and investors from long to short and back again. The price of XLNX has crossed above and below the 50-day moving average line several times in recent months but now XLNX is above the rising 50-day line. The slower-to-react 200-day moving average line was tested and broken in February but now prices are back above this indicator too. The volume pattern has been confusing the past few months but two things stand out -- one is that the new highs made in January and March were not accompanied by "breakout like" volume. Second, the daily On-Balance-Volume (OBV) has been stalled since October and is not showing a pattern of aggressive buying. The trend-following Moving Average Convergence Divergence (MACD) oscillator has also moved up and down around the zero line and just started to narrow towards a possible crossover signal.
In this weekly bar chart of XLNX, below, we see some slippage in the indicators. Prices are above the rising 40-week moving average line but the weekly OBV line peaked at the end of October. The 12-week momentum study make a peak in late November and a lower peak now creating a bearish divergence when compared to the price action.
In this Point and Figure chart of XLNX, below, we can see that prices reached a price target of $74.11.
Bottom line -- traders and investors who may be long XLNX should consider raising or entering a sell-stop to a close below $68 -- this would break the rising 50-day and 200-day averages.