Chipmaker Texas Instruments (TXN) reported their latest quarterly numbers after the close of trading Tuesday and while they beat expectations on EPS and revenue, the stock is trading lower Wednesday, well off its early low. Let's check on the charts and indicators.
In this daily bar chart of TXN, below, we see some "interesting" developments. Prices declined from October to February followed by a strong but not durable rally into late March. TXN declined back down to retest the February lows. Trading volume surged in late January and early February and then declined until recently. The slope of the 200-day moving average line is negative and so far rallies to the line from below have failed.
The On-Balance-Volume (OBV) line has behaved oddly in that it has soared sharply from early March even though prices have decreased. The Moving Average Convergence Divergence (MACD) oscillator has declined and is back below the zero line for an outright sell signal.
In this weekly Japanese candlestick chart of TXN, below, we do not have this week's price action charted, but we do notice the upper shadows over the past five weeks. The slope of the 40-week moving average line is bearish. The weekly OBV line looks weaker than the daily line. The MACD oscillator is bearish.
In this daily Point and Figure chart of TXN, below, we can see a potential downside price target in the $141 area.
In this second Point and Figure chart of TXN, below, we used weekly price data and here too the $141 price target shows up.
Bottom line strategy: TXN could make a key reversal Wednesday and close higher on the day, but the overall patterns on the charts and the indicators are bearish and traders should continue to be defensive.
