For his second Executive Decision segment of "Mad Money" Monday, Jim Cramer spoke with Liam Griffin, president and CEO of Skyworks Solutions Inc. (SWKS) , the semiconductor maker that last week posted a third-quarter earnings beat with a bullish forecast for the rest of 2020.
Griffin said the world is changing rapidly and the need for seamless, secure wireless communications is essential. He said the 5G wireless transition represents a huge opportunity for Skyworks in many areas.
When asked about the coming transition to 5G, Griffin noted that less than 10% of all devices available today have 5G, but over the next 12 months everyone will have 5G-enabled devices.
Cramer said he remains a big believer in the company.
Let's check and see if we can believe in further gains on the charts.
In this daily bar chart of SWKS, below, we can see that prices were cut in half from January to March. Trading volume increased in March, suggesting that investors took advantage of the lower prices to become buyers. The stock has rallied back and made new highs in June. Prices are above the rising 50-day moving average line and the rising 200-day moving average line. A bullish golden cross buy signal can be seen in late May.
The On-Balance-Volume (OBV) line has moved higher the past 12 months, telling us that buyers have been more aggressive for some time now. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line in bullish territory but could go up or down as prices move from here.
In this weekly bar chart of SWKS, below, we can see a longer-term bottom pattern for most of 2019. Prices have taken off on the upside with no overhead resistance. SWKS is above the rising 40-week moving average line. The weekly OBV line has been positive/bullish since bottoming in early 2019. The MACD oscillator is bullish above the zero line, but we can see that the two moving averages that make up this indicator have begun to narrow. This tells us that the strength of the rally is weakening a little.
In this first Point and Figure chart of SWKS, below, we used daily price data to construct the chart and we can see that prices are in an uptrend with a potential price target in the $163 area.
In this second Point and Figure chart of SWKS, below, we used weekly price data. Here the chart shows a projected $238 price target.
Bottom line strategy: The charts of SWKS are bullish. Traders should trade SWKS from the long side at current levels risking a close below $125. The $163 area and then the round number of $200 are our first price targets for the months ahead.