We recently looked at the charts of Xilinx (XLNX) and said, "The gap to the downside last month on heavy volume has made an impression on me -- a bearish impression. XLNX looks like it will decline to prior resistance and the intersection of the 200-day moving average line in the $95 area. If you did not get defensive last month you should now."
This Jim Cramer favorite plunged plunged 7.7% Thursday and made a new low for the move down Friday. Let's see how the charts look now.
In the daily bar chart of XLNX, below, we can see that prices and technical studies have continued bearish in the past week. The slope of the 50-day moving average line has weakened and prices are closer still to the rising 200-day line.
Trading volume increased Thursday and the daily On-Balance-Volume (OBV) line made a new low for the move down -- a sign of more aggressive selling. The trend-following Moving Average Convergence Divergence (MACD) oscillator has sunk to a new low too.
In the weekly bar chart of XLNX, below, we can see further downside risk. Prices are heading quickly toward a test of the rising 40-week moving average line. There is some chart support anticipate around $90 but the $80-$70 should be stronger support.
The weekly OBV line has weakened the past five weeks and the MACD oscillator has crossed to a take profits sell signal.
In this Point and Figure chart of XLNX, below, we can see the new low for the move down and the potential $80 price target.
Bottom-line strategy: XLNX is getting oversold (down too far or too fast) so a bounce could develop at any time. However, all our indicators suggest further weakness ahead. Stay defensive.