In his first Executive Decision segment of Wednesday's "Mad Money" program, host Jim Cramer sat down with Liam Griffin, chairman, president and CEO of chipmaker Skyworks Solutions Inc. (SWKS) , to learn more about its business and the ongoing semiconductor shortage.
Griffin said while Skyworks remains all in on 5G wireless, it also has built a diversified portfolio serving other great businesses, including automotive, wireless infrastructure, energy management and GPS.
When asked about the semiconductor shortages, Griffin said Skyworks is starting to see some of the headwinds abating, but it still only takes one missing component to hold up an entire assembly line. Skyworks manufactures the bulk of its products in Boston, Los Angeles and Mexico.
"We need to do more to bring chip manufacturing back to the U.S.," Griffin said when asked about the CHIPS Act working its way through Congress. Skyworks proves that you don't need to manufacture goods in China to be profitable, he said.
In our last review of the charts of SWKS on Oct. 7 we wrote, "Aggressive traders could probe the long side of SWKS at current levels and increase their purchases if SWKS can close at $164 or higher on Friday."
Let's take another look at Skyworks, which is a holding of the Action Alerts PLUS portfolio.
In this daily bar chart of SWKS, below, we can see that prices were not able to close above $164 and subsequently dipped to $155, so I will assume that aggressive traders did not buy SWKS. Prices finally rallied into November and have dipped back to our $160 level to give us a higher low (part of what we look for on the start of an uptrend). SWKS is still trading below the declining 50-day moving average line and below the cresting 200-day line. The On-Balance-Volume (OBV) line shows weakness from early July, telling us that sellers of SWKS have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator just failed to break above the zero line, thus keeping this indicator bearish.
In this weekly Japanese candlestick chart of SWKS, below, we find a bearish picture at this point in time. Prices are trading below the bearish (negative slope) 40-week moving average line. The weekly OBV line remains in an intermediate-term decline. The MACD oscillator is in sell territory but slowly narrowing.
In this daily Point and Figure chart of SWKS, below, we can see that the software is projecting a potential upside price target in the $210 area. A trade at $175.22 is needed to refresh the uptrend.
In this weekly Point and Figure chart of SWKS, below, we can see that prices have reached a downside price target. It's a start.
Bottom line strategy: 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.