Skyworks Solutions, Inc. (SWKS) is recuperating from a long decline last year. The comeback, part of a wider resurgence of semiconductor stocks noted by Jim Cramer, looks like it has further to go but could disappoint traders who are too bullish. Let's check out the charts and indicators.
In the daily bar chart of SWKS, below, we can see a decline in the stock price of SWKS going back to last March. The declining 50-day moving average line shows a negative slope until late January, when SWKS rallied above the 50-day line. Earlier this month prices gapped higher on strong volume and touched the underside of the bottoming 200-day line. Prices are still below the 200-day average, but look like they could eventually break above it.
The daily On-Balance-Volume (OBV) line has been strong so far this new year and suggests that buyers of SWKS have been more aggressive. The Moving Average Convergence Divergence (MACD) turned bullish in late January but has since crossed to the downside for a take-profits sell signal.
In this weekly bar chart of SWKS, below, we can see the topping pattern on SWKS in 2017 and the subsequent decline. Prices have rallied back to the underside of the declining 40-week moving average line.
The weekly OBV line is still in a longer-term downtrend, but it has improved the past two months. The weekly MACD oscillator crossed to the upside January for a cover-shorts buy signal, but an outright go-long signal is some weeks in the future.
In this Point and Figure chart of SWKS, below, we can see the sharp rally from January and the recent consolidation. There is an $89 price target at the momentum, but that is not a significant move from current levels.
Bottom-line strategy: SWKS is pointed upward at this moment, but a pullback to fill the gap from earlier this month could be just as possible as gains to around $90. If you elect to go long SWKS, I would buy strength above $87.32.