TXN closes within prior day's range
Texas Instruments Incorporated (TXN) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, TXN finished the week -2.12% lower at 101.09 after gaining $1.56 (1.57%) today, significantly underperforming the Nasdaq 100 (2.77%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (TXN as at Oct 12, 2018):
Friday's trading range has been $2.82 (2.75%), that's above the last trading month's daily average range of $2.19. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for TXN.
Prices are trading close to the key technical resistance level at 103.15 (R1).
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 105.54. The last time this happened on Tuesday, TXN actually lost -3.53% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term. With its 50-day moving average crossing below its 200-day moving average, the stock has entered a so-called "Death Cross" for the first time since March 1, 2016 today. Showing increasing downward momentum in the short and medium-term the "Death Cross" is known to indicate a potential bear market on the horizon.
Buying could accelerate should prices move above the close-by swing high at 103.15 where further buy stops might get triggered. Selling could speed up should prices move below the nearby swing low at 98.81 where further sell stops might get activated. With prices trading close to this year's low at 96.99, downside momentum could accelerate should the share break out to new lows for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Texas Instruments. Out of 627 times, TXN closed higher 56.78% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 59.49% with an average market move of 1.23%.