In early August, we covered Skyworks Solutions (SWKS) and saw the stock as being vulnerable, noting in that short update that "we can see that SWKS is making an outside day as it tests the flat 50-day moving average line. A close below $104 will be a new low close for the recent move down and it would break the 50-day average line."
Five weeks on, we find that SWKS spent much of August below the 50-day moving average line but is back above the rising 50-day line.
Let's review all our charts and indicators to see if prices are still vulnerable or if the bears have gone into hibernation and an upside breakout could be coming.
In this daily bar chart of SWKS, above, we can see prices are indeed above the rising 50-day and 200-day average lines. The daily On-Balance-Volume (OBV) line has been neutral since early June. It did not decline much when price dipped in June and it has not broken out on the upside in advance of a price breakout. In the bottom panel, the Moving Average Convergence Divergence (MACD) oscillator has turned up above the zero line for an outright go-long signal. In early August, the MACD oscillator was in a bearish mode.
In this weekly bar chart of SWKS, above, we can see prices are still above the rising 40-week moving average line. The weekly OBV line is still flat and not signaling aggressive buying or selling. The weekly MACD oscillator has narrowed toward a possible upside crossover and fresh outright buy signal.
In this Point and Figure chart of SWKS, above, we can clearly see a trade at $109.77 will be one breakout and a trade at $111.98 will be a second. A possible target of $127 can be seen.
Bottom line: It looks like SWKS wants to break out on the upside but I would like to see signs of buying with a rising OBV line. Traders should go with the upside if SWKS breaks above $110 and $112.