Texas Instruments (TXN) has rallied back to near its January zenith. Will prices break through to new highs or did we reach the top end of a trading range? Let's review the charts and indicators for clues to the next move of TXN.
In this daily bar chart of TXN, below, we can see that prices corrected from January to late April. TXN has rallied back from an April low and is now above the rising 50-day moving average line and the rising 200-day line. The 200-day average line was tested in late April. The volume pattern and the On-Balance-Volume (OBV) line have been disappointing. The turnover or volume declined from late April to now. Shrinking volume as a stock rallies is not a bullish picture. If investors and traders believed in the rally the volume should expand. The OBV line has not risen much with the price advance telling us that buyers of TXN have not been aggressive. The Moving Average Convergence Divergence (MACD) oscillator is poised to turn down to a take-profits sell signal.
In this weekly bar chart of TXN, below, we can see that our indicators are stronger than on the daily time frame. Here prices are above the rising 40-week moving average line. The weekly OBV line has made a new high before prices have pushed past $120. The weekly MACD oscillator crossed to the upside last month for a fresh go long signal.
In this Point and Figure chart of TXN, below, we can see the prices have gone straight up in May and June (look for the "5" and the "6" on the chart). A trade at $120.05 would be a breakout on this kind of chart and could open the way to a longer-term price target around $152.
Bottom line: In the short-run TXN could probably trade sideways for a couple weeks. Longer-term a move to new highs is probably in the cards. Longs should risk just below $105.