Stocks Under $10 holding ON Semiconductor (ON) is close to an important upside breakout on the longer-term charts. ON has nearly doubled this year, but more gains lie ahead based on the technical condition of the charts and indicators. Sound interesting?
In this one-year daily bar chart of ON, above, we can see the rise from $7 back in February. The price action shows periods of strength followed by periods of sideways consolidation. A bullish golden cross in early August can be seen as the 50-day moving average line crossed above the 200-day moving average line. ON is now above both rising averages. The On-Balance-Volume (OBV) line has been rising all year and confirms the price strength with signs of aggressive buying. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish mode, rising above the zero line.
This three-year weekly chart of ON, above, can be viewed at least two ways. One way to view this chart is a large sideways trading range bounded by $7 on the downside and the $13 to $13.50 area on the upside. Another way to look at this chart is to visualize a large cup pattern in the past two years. Prices are above the rising 40-week average line. The weekly OBV has been rising during the second half of the cup pattern and the weekly MACD oscillator has been bullish since late July.
In this long-term Point and Figure chart of ON, above, you can see the higher lows going back to 2008. You can also see that $13.50 has marked the upper end of the chart. A trade at $14 will be an important breakout and open the way for a longer-term potential advance to $20.
Bottom line: Traders should go long ON on any dip toward $12.50 or on strength above $13.50.