Since its powerful post earnings surge back on July 24th shares of Texas Instruments has struggled to make further headway. The $130.00 to $132.00 area has proven to be a very heavy supply zone. TXN has put in multiple weekly highs in this range since the big earnings inspired move. Today the stock is piercing a key trendline that links the August and multi week September lows. This 3% drop is also driving TXN towards its first sub 50D moving average close since mid June.
Today’s sell off is quite a reversal from last week’s action. TXN printed a new all time high on Oct. 1st. We would not be surprised if there was some more follow through on the downside in the near term. A logical downside target is the $120.00 area. This key zone includes the initial 2019 highs set back in April as well as the May peak. The powerful July 24th breakout gap(earnings) is also in this area. Finally, the 1/3 retracement level of the bull move off the May low is just above $120.00.
We are currently long TXN in some managed accounts and will be looking to add on further weakness.
TXN is the number 3 weighting in the SMH(6%).
TXN is due to report earnings on Oct. 22nd(PM).