Chip Stock Boasts Multiple Layers of Support
A round of upgrades could provide tailwinds as well
Texas Instruments recently provided long-term guidance
The shares of
Texas Instruments Incorporated (NASDAQ:TXN) just conquered their year-over-year breakeven, as well as their round 10% year-to-date level, after the company provided long-term guidance on cash flow and capital expenditures.
What’s more, the security is breaking out above a trendline connecting lower highs since March, as it moves beyond pre-earnings levels. It’s also worth noting that TXN has completed an inverse head and shoulder pattern, with the head marking the low point at its 320-day moving average in October. There's additional longer-term support at TXN's 1,000-day moving average.
Analysts are overwhelmingly bearish toward Texas Instruments stock, with 24 calling it a tepid “hold” or worse, while 10 say “buy” or better. This leaves plenty of room for price-target hikes and upgrades going forward. Additionally, short interest is rolling over from multi-year highs, while implied volatility (IV) sits at a one-year low.
Our recommended call has a leverage ratio of 7.9, and will double in value on a 14.2% pop in the underlying shares.
Subscribers to Schaeffer's Weekend Trader options recommendation service received this TXN commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.
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