Wireless semiconductor company Skyworks Solutions (SWKS) reported an earnings beat Thursday evening and raised their quarterly dividend. Good news but the charts partially reflect this improvement. Let's check and see what we might expect going forward.
In this daily bar chart of SWKS, below, we can see a long decline to a low in mid-June and an early July retest of that low. Prices have improved in recent weeks and now trade above the rising 50-day moving average line. The still bearish 200-day moving average line intersects above the market in the $130 area.
The On-Balance-Volume (OBV) line made a low in May and a retest in June before showing more sustained firmness into August. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In this weekly Japanese candlestick chart of SWKS, below, we can see a bullish bottom reversal pattern at the end of June/beginning of July - a piercing pattern with bullish confirmation. Candlesticks can identify trend changes but they do not forecast price targets.
The 40-week moving average line shows a turn upwards into July. The MACD oscillator has crossed to the upside for a cover shorts buy signal.
In this daily Point and Figure chart of SWKS, below, we can see a nearby price target in the $122 area.
In this weekly Point and Figure chart of SWKS, below, the software is projecting a potential price target in the $162 area.
Bottom line strategy: A rally to the weekly Point and Figure target of $162 is a long shot in my opinion. A rally to the $120-$125 is doable but also represents an area of potential resistance. Traders who may be long SWKS should consider trimming positions on available strength.
