Shares of Texas Instruments (TXN) were rated a new buy by a sell side firm Thursday, but will this endorsement overcome weakness from downgrades and fears of less demand as the odds of a recession rise? Let's check out the charts and indicators of this maker of analog and embedded semiconductors.
In this daily bar chart of TXN, below, we can see that prices have weakened since October. TXN has made a low in June but the indicators we favor do not show that traders are convinced. Trading volume does not show us a strong increase at the low and the daily On-Balance-Volume (OBV) line remains in a downward trend, telling us that sellers of TXN are more aggressive than buyers. The slope of the 50-day and 200-day moving averages are negative (bearish). The Moving Average Convergence Divergence (MACD) oscillator is below the zero line but poised for a cover shorts buy signal.
In this weekly Japanese candlestick chart of TXN, below, we see a bearish picture. Prices are in a down trend and no bottom reversal pattern is visible, plus there are no lower shadows of note. The weekly OBV line is pointed down and the MACD oscillator is in a bearish alignment below the zero line.
In this daily Point and Figure chart of TXN, below, we can see a downside price target in the $121 area.
In this weekly Point and Figure chart of TXN, below, we see the same downside price target of $121.
Bottom line strategy: TXN could stage a bounce if the broad market averages rally, but otherwise the charts and indicators are pointed lower.
