For his second "Executive Decision" segment of Wednesday's Mad Money program, host Jim Cramer sat down with Thomas Caulfield, CEO of global semiconductor manufacturer GlobalFoundries (GFS) with plants in the U.S., Germany and Singapore.
GlobalFoundries just delivered an 18-cents-a-share earnings beat with huge gross margins as semiconductor shortages rage on around the globe.
The company has 15,000 employees and is shifting to balanced production across their facilities.
When asked about those facilities, Caulfield said every one of them is running "white hot," with 24/7 production that is over capacity to meet demand as quickly as possible. His company focuses on "feature rich" semiconductors that power everything from autos to 5G wireless products.
Caulfield said the Chips Act, working its way through Congress, is much needed legislation, as the U.S. accounts for 50% of semiconductor demand, but manufactures only 12% of the world's chips. The U.S. needs to be competitive, he said, and that's what the Chips Act will help accomplish.
Let's check on the charts.
In the daily bar chart of GFS, below, we can see that the share price has traded sideways in its relatively short history. Prices are currently in a short-term downtrend and trade below the declining 20-day and the bearish 50-day moving average lines. With less price history to work with I tend to shorten the time frame for the moving averages from 50- and 200-days to 20- and 50-days.
The On-Balance-Volume (OBV) line has moved up and down with the price action and the Moving Average Convergence Divergence (MACD) oscillator is bearish.
In this weekly Japanese candlestick chart of GFS, below, we can see a top reversal pattern in March but no bottom reversal and no lower shadows.
In this daily Point and Figure chart of GFS, below, we can see a potential downside price target in the $41 area.
Bottom-line strategy: We do not have much price history to work with but so far GFS is not poised for a rally. Let's just watch and wait.
