A sell side firm likes ON Semiconductor (ON) ahead of their quarterly results. Let's check out the charts and indicators to see if this positive view is warranted.
In this daily bar chart of ON, below, we can see several dips towards $50 since January. Prices made a slight new low recently but it did not precipitate a new decline as of this writing. Prices have bounced slightly but remain below the declining 50-day moving average line and below the cresting 200-day moving average line.
The On-Balance-Volume (OBV) line was steady from February but turned lower from the middle of June signaling a shift to more aggressive selling. The Moving Average Convergence Divergence (MACD) oscillator has been crossing above and below the zero line for several months.
In this weekly Japanese candlestick chart of ON, below, we see a mixed picture. Prices are trading below the cresting 40-week moving average line. The chart pattern the past eight months is a large rectangle though it could morph into something else.
In recent weeks the chart has become a little weaker and the weekly OBV line has turned lower. The MACD oscillator is close to moving below the zero line for an outright sell signal.
In this daily Point and Figure chart of ON, below, we can see a potential price target in the $65 area.
In this second Point and Figure chart, below, we used weekly price data. Here the X's and O's yield a target of $34.
Bottom line strategy: The charts of ON looked more positive to us on June 9 but traders should have been stopped out. A close below $50 could open the way to further declines.
