In Jim Cramer's game plan for this week he pointed out Skyworks Solutions Inc. (SWKS) as one name whose earnings should be strong. The company's numbers topped analyst fiscal first-quarter earnings estimates Thursday. Also, its board approved a large share buyback plan and gave upbeat guidance with the onset of the transition to 5G mobile networks.
We last reviewed the charts of SWKS on Nov. 2 where we wrote that, "I do not mind an upside price target of $206 for SWKS, but I do mind a downside price target of $123 as that could precipitate a deeper decline. Raise sell stops slightly to $131." The shares stayed on the defensive for November but never got close to our sell stop of $131. A fresh advance began in early December.
Let's check on the charts again with SWKS up sharply in pre-market activity.
In the daily bar chart of SWKS, below, we can imagine prices trading at the top of the chart around $180. Prices have been in an uptrend above the rising 50-day moving average line and above the positively sloped 200-day moving average line.
The trading volume has been stronger in recent days leading up to Thursday's report. The On-Balance-Volume (OBV) line has been strong since early December telling us that buyers of SWKS have been more aggressive.
The 12-day price momentum study shows equal highs in December and January, which is a small bearish divergence when compared to the price action. With prices poised to open with a gap higher this Friday this divergence will be ignored.