Conclusion, Investment Implications, Strategy

Texas Instruments (TXN) appears to be resuming its mid 2020 major uptrend amid quarterly relative performance versus the benchmark S&P 500 (SPX).  A sustained rise above the $166.92 area would help confirm this and target an additional 16% rise to $205.00 per share.  This is an Asbury Momentum trade idea.

Analysis and Rationale

Texas Instruments Incorporated (TXN) designs, manufactures and sells semiconductors to electronics designers and manufacturers worldwide. It operates in two segments, Analog and Embedded Processing. The company also provides DLP products primarily for use in projectors to create high-definition images; calculators; and application-specific integrated circuits. Texas Instruments Incorporated markets and sells its semiconductor products through direct sales and distributors, as well as through its website. The company was founded in 1930 and is headquartered in Dallas, Texas.

The upper panel of Chart 1 below plots TXN daily since October 2020 along with its 200- and 50-day moving averages, widely-watched major and minor trend proxies.  The lower panel displays a corresponding daily relative performance chart of TXN versus the benchmark S&P 500 (SPX, blue) along with its 63-day moving average (green, quarterly, our Strategic time period).

Chart 1

The colored highlights in the upper panel show that TXN appears to be resuming its June 2020 major uptrend, as defined by its 200-day MA, following successful tests of the 50-day MA on Jan 27th and Feb 5th.  Meanwhile, CBRE’s current trend of quarterly relative outperformance versus SPX as shown in the lower panel also appears to be resuming following consecutive tests of it on those same dates.  A sustained rise above the 50-day MA, currently situated at $166.92, would help to confirm this and would target an additional 16% rise to $205.00 per share. 

Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $168.06 area, a long entry price of $176.84 would provide a 1:3.2 risk/reward ratio (risking $1.00 to make $3.20) with an initial risk of 5.0%.

Table 1

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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.