Jim Cramer recently highlighted Xilinx (XLNX) as one of 10 companies that could be acquired in 2017, arguing that it makes sense for Broadcom (AVGO) to buy the firm.
"It's time for Broadcom to make another deal. Why? Every time Broadcom buys a company, the stock goes higher," Cramer said at an economic conference sponsored by our sister site TheDeal.com.
XLNX is in fine shape from a technical perspective. Prices are pointed up and new 52-week highs are probably in the cards in the short-run. A close above $55 is probably all that is needed to encourage the bulls.
Let's check out the daily and longer-term charts to see what may lie ahead.
XLNX is in fine shape from a technical perspective. Prices are pointed up and new 52-week highs are probably in the cards in the short-run. A close above $55 is probably all that is needed to encourage the bulls.
Let's check out the daily and longer-term charts to see what may lie ahead.
In this 12-month daily bar chart of XLNX, above, we can see a very positive setup since July. From January through June it looks like XLNX made a large equilateral triangle formation. The triangle broke out on the upside in July, with prices approaching their price target from the pattern in late August. From July until now XLNX has been in a "high level consolidation" pattern.
You might ask how a $55 to $49 trading range is a consolidation pattern? Just look at the On-Balance-Volume (OBV) line. The OBV line holds very steady in September through November even when prices dip $6. Holders of XLNX stayed with those positions even as prices declined in October.
In the lower panel is the Moving Average Convergence Divergence (MACD) oscillator which turned bullish again in mid-November.
In this five-year weekly chart of XLNX, above, we can see a two-year saucer-like pattern. Prices are now above the rising 40-week moving average line. The weekly OBV line is pointed up and confirming the price gains this year. The weekly MACD oscillator has been above the zero line for months (bullish) and is poised to cross to a new buy signal.
This Point and Figure chart of XLNX, above, is clearly headed in the right direction. Prices have maintained a long-term uptrend using this charting technique. A trade at $56 will be a new high on this chart and open the way for gains to $62 or higher in 2017.
