Semiconductor sector news and analysis

A bullish signal suggests further record highs for Texas Instruments stock

The shares of Texas Instruments Incorporated (NASDAQ: TXN) are higher today, most recently up 2.8% to $ 174.14. And while equity has cooled from an all-time high on February 16 of $ 181.80 in the past few weeks, it is still 63% ahead of last year. Better still, on this retreat, semiconductor stocks trading is near a historically bullish trendline, suggesting that TXN could expect further record highs in the not-too-distant future.

Texas Instruments stock was only one standard deviation from its 80-day moving average after spending much time above that trendline. According to Schaeffer’s senior quantitative analyst Rocky White, at least six similar signals have occurred in the past three years. A month later, 83% of the time, the stock returned positive returns, which translates into an average gain of 5.1% for that period. From its current location, a move of similar magnitude would take TXN to a brand new record high of $ 183.02.

TXN 80 days

The brokerage group is still pessimistic about Texas Instruments stock and leaves plenty of room for upgrades in the future. Of the 22 analysts in the coverage, 13 had a lukewarm “hold” or a poorer rating. The 12 month consensus target of $ 182.15 represents a 4.5% premium over current levels.

Shifting the option pits could keep the wind on the security guard’s back. This corresponds to TXN’s 10-day put / call volume ratio of 1.98 on the International Securities Exchange (ISE), the Cboe Options Exchange (CBOE) and the NASDAQ OMX PHLX (PHLX), which is over 85% of the readings in their annual range. This is reflected in the Schaeffer’s Put / Call Open Interest Ratio (SOIR) of 1.44, which is in the 82nd percentile of the last 12 months. This means that short-term traders have rarely been more biased.

After all, TXN options are pretty cheap right now. The Schaeffer’s Volatility Index (SVI) of 31% is above 11% of all other values ​​of the past year. In other words, option players are currently pricing in lower than usual volatility expectations.

LEAVE A REPLY

Please enter your comment!
Please enter your name here