Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide. The Analog segment offers high volume analog and logic products for automotive safety devices, touch screen controllers, low voltage motor drivers, and integrated motor controllers; and power management products that include catalog and application-specific standard products to enhance the efficiency of powered devices using battery management solutions, portable power conversion devices, power supply controls, and point-of-load products. The Embedded Processing segment offers microcontroller products, which are systems with a processor core, memory, and peripherals to control a set of specific tasks for electronic equipment; processor products comprising digital signal and applications processors; and connectivity products consisting of electronic devices to connect and transfer data.
Take a look at the 1-year chart of Texas (NASDAQ: TXN) below with added notations:
TXN started from a $46 low back in February and rallied from that low up to a $75 high in November. After that, the stock hit that $75 as resistance again (green), forming a solid 52-week high resistance at that level. Yesterday, the stock finally managed to hold that level, which should lead to even higher prices overall.
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The Tale of the Tape: TXN broke its 52-week resistance at $75. The possible long position on the stock would be on a pullback down to that level with a stop placed under it. A break back below $75 could negate the forecast for a move higher.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach