The charts and indicators of Skyworks Solutions (SWKS) were analyzed back in December, and I gave this bottom line: "Without a bullish divergence from the momentum study I feel that I cannot (yet) recommend approaching SWKS from the long side. The $100-$110 area is likely to act as resistance for SWKS. Protect long positions and take appropriate action if we close below $94."
Looking back at the price action since December 11 (chart below) I can see that a February/March rally briefly broke above resistance and the selloff of the past two months recently closed below $94. I guess that was a "whipsaw" move. Is the correction over or is there more risk ahead? Back to the charts of this Apple (AAPL) supplier seen as a key the market by Jim Cramer.
In this daily bar chart of SWKS, below, we can see that prices are trading below the lows of 2017. The $95-$100 area is now anticipated to act as overhead resistance. The 50-day moving average line recently crossed below the declining 200-day line for a bearish dead cross.
The daily On-Balance-Volume (OBV) line has been declining since early November but has bounced recently. A declining OBV line tells us that sellers of SWKS are more aggressive. There is a relatively small bullish divergence between the 12-day momentum study making higher lows in April and prices making lower lows. This is not a big divergence but it may be enough. Rising momentum readings tell us that the selloff is slowing.
In this weekly bar chart of SWKS, below, we can see that prices are below the 40-week moving average line and its slope has turned down. The weekly OBV line shows weakness the past two months and the Moving Average Convergnce Divergence (MACD) oscillator on this time frame is bearish.
In this Point and Figure chart of SWKS, below, we can see a downside price target of $77. A rally to $94 would improve the chart.
Bottom line: My friend John Bollinger likes to say that technical analysis is like a windsock at an airport and not a crystal ball. Technical analysis can help with the direction but it can't call all the jiggles. Overall, the charts of SWKS are mixed. There is a bullish divergence from momentum and that is positive but I do not yet see signs of more aggressive buying.
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