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  1. Home
  2. / Investing

Texas Instruments Charts Show a Possible Inverse Head and Shoulders Pattern

Let's check the charts.
By BRUCE KAMICH
Jul 03, 2019 | 11:24 AM EDT
Stocks quotes in this article: TXN

During Tuesday night's Mad Money program, Jim Cramer mentioned that Texas Instruments (TXN) could benefit from a trade truce with China. Let's check out the charts of TXN.

In this daily bar chart of TXN, below, we can see that prices have stalled a number of times in the $118-$120 area - not just in the past 12 months but since early 2018 (see the weekly chart, below). Prices are trading above the flat 50-day moving average line and the bottoming 200-day line.

Price-wise the daily chart looks strong but trading volume has been declining since January, however, the On-Balance-Volume (OBV) line has only stalled in the past two months.

The Moving Average Convergence Divergence (MACD) oscillator is in a bullish mode above the zero line since the middle of June.

In this three-year weekly bar chart of TXN, below, we can see that prices are above the slightly rising 40-week moving average line. The price pattern on this weekly chart could be a large inverse head and shoulders pattern with a neckline at $120.

The weekly OBV shows a slight decline the past 12 months and the MACD oscillator is above the zero line and perhaps poised to turn higher for a new buy signal.

In this Point and Figure chart of TXN, below, we can see a potential upside price target of $138.

Bottom line strategy: The charts of TXN look bullish. If you are an investor looking beyond a trade deal AND can afford to risk below $105 (the right shoulder of the inverse head and shoulders pattern) then you approach the long side looking for $138 as the first upside price target.

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TAGS: Investing | Stocks | Technical Analysis | Trading | Semiconductors & Semiconductor Equipment | Mad Money

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