Analog Devices (ADI) is trading higher Wednesday on the heels of an earnings beat and in-line revenue figures for Q2. Let's check out the charts of this technology company.
In this daily bar chart of ADI, below, we can see that prices are making a new high for the recent move up from the mid-March nadir. Prices are above the bottoming 50-day moving average line and above the still declining 200-day moving average line. Trading volume was heavy into the March low and has been tapering off since then.
The On-Balance-Volume (OBV) line improved a bit from the March low but it has weakened this month and tells us that sellers seem to be using this rally to reduce long positions. The Moving Average Convergence Divergence (MACD) oscillator is trying to turn upwards to a new buy signal after showing some weakness earlier this month.
In this weekly bar chart of ADI, below, we see a mixed picture. Prices have been testing the underside of the flat 40-week moving average line.
The weekly OBV line has been stalled since early April and the MACD oscillator has crossed to a cover shorts buy signal. Not the most robust picture.
In this Point and Figure chart of ADI, below, we can see a breakout at $114.23 and a potential upside price target in the $145 area.
Bottom line strategy: Traders could go long ADI and risk below $105 for now. On the upside we look for gains to the $145 area.
