The Chinese economy is showing signs of recovery, Jim Cramer told viewers of his "Mad Money" program Tuesday night. That's great news for American companies that do business there. A recovering China is good for Nike (NKE) , but the biggest winners could be the semiconductors, or a company like Skyworks Solutions (SWKS) , said Cramer, who also says he's watching China and Europe right now.
Let's check out the charts of SWKS.
In this daily bar chart of SWKS, below, we can see a dramatic looking "V" pattern, as prices declined from January to the middle of March and then recovered quickly. SWKS is above the rising 50-day moving average line and the rising 200-day moving average line. We can also see a recent golden cross buy signal as the 50-day line has crossed above the 200-day line. The daily On-Balance-Volume (OBV) line has recovered the ground it lost in February and early March and is knocking on a new all-time high.
A firm and rising OBV line happens when buyers are more aggressive with heavier volume being transacted on days when prices close higher. The trend following Moving Average Convergence Divergence (MACD) oscillator has been bullish since crossing above the zero line in late April.
In this weekly bar chart of SWKS, below, we can see that prices are in a steep uptrend and above the rising 40-week moving average line. The weekly OBV line is improving and the MACD oscillator is bullish having recently crossed above the zero-line.
In this daily Point and Figure chart of SWKS, below, we can see a projected upside price target in the $140 area.
In this weekly Point and Figure chart of SWKS, below, we can see a potential price target of $206 on this longer time frame.
Bottom line strategy: SWKS may or may not pull back for a slightly better buying point so traders should do some buying at current levels. Risk a close below $115 for now. $140 and then the $200 area are our price targets.