Teradyne (TER) is in the business of delivering automation. A large sell-side firm came up with a list of 15 firms with strong fundamentals and less macro vulnerability. Teradyne made the list, so let's see what the charts look like.
In this daily bar chart of TER, below, we can see that prices made a long drifting correction until October. A new low for the move down in October was followed by a strong rally into late December. A pullback from the December zenith has been unfolding. Prices are trading below the cresting 50-day moving average line but above the rising 200-day line.
The On-Balance-Volume (OBV) line showed some improvement from October into November but it has since weakened. The 12-day price momentum study does not show us a bullish divergence to tell us that the pace of the pullback or correction has slowed down.
In this weekly Japanese candlestick chart of TER, below, we can see that prices have performed strongly for patient investors over the past three years. Prices are trading above the rising 40-week moving average line.
The weekly OBV line has been positive over the past three years with only a slight rounding over in recent weeks. The MACD oscillator has crossed to the downside for a take profit sell signal.
In this daily Point and Figure chart of TER, below, we can see a potential downside price target of $135.
In this weekly Point and Figure chart of TER, below, we can see that the software projects the $293 area as a potential price target.
Bottom line strategy: Regular readers of Real Money know that I have no problem combining quantitative and fundamental recommendations when reviewing the charts. No one investment approach is perfect and delivers positive returns 100% of the time. Combining approaches is the way to go in my opinion.
I generally like the message of the charts (above) but I would like to see additional accumulation and a stronger OBV line before a long recommendation. A higher low would also help me figure out a suggested stop loss.
