We reviewed the charts of Skyworks Solutions (SWKS) back on November 18 and wrote that "I don't think SWKS is entirely out of the woods yet, so I would defer purchases for the time being. Another look could be worthwhile in a few weeks perhaps."
B. Riley just downgraded the semiconductor firm to "hold" from "buy" and cut their price target, so let's check the charts again.
In this daily bar chart of SWKS, below, we can see that prices are still in a downtrend from July. Prices are trading below the declining 50-day moving average line and the bearish 200-day simple moving average line. The trading volume has increased since November as more traders and investors get the message.
The On-Balance-Volume (OBV) line has made a new low for the move down and foreshadows a new price low. A weak OBV line happens when traders are more aggressive sellers than buyers.
The 12-day price momentum study does not show us a bullish divergence to suggest a turnaround is possible.
In this weekly candlestick chart of SWKS, below, we see a bearish picture. Prices are in a downtrend below the declining 40-week moving average line. The weekly OBV line has been in a decline since June as traders have traded more volume on down weeks than up weeks. The MACD oscillator has been bearish since October.
In this daily Point and Figure chart of SWKS, below, we can see that the software is projecting a potential price target of $107.
In this weekly Point and Figure chart of SWKS, below, we used a five-box reversal filter. Here the chart reveals a price target of $55.
Bottom line strategy: SWKS could bounce in the short-run but the charts and indicators do not show us at or near a bottom. Continue to avoid the long side of SWKS.
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