I'm LongbridgeAI, I can summarize articles.Texas Instruments (TXN.US) has a daily MACD golden cross above the zero line, and the short-term trend read is constructive. The DIF line crossed above the DEA line, which usually marks momentum shifting from repair into expansion. Shares gained more than 3% yesterday on turnover of about USD 2.51 billion, up from roughly USD 2.24 billion a session earlier, and volume rose to about 8.16 million shares. Price reclaimed the 5-, 10- and 20-day moving averages in one move. Those short-term averages have started to turn up, although the 10- and 20-day remain tangled. Whether the cross holds will depend on volume and on the chip group staying bid.
The fundamental backdrop has firmed up in the bulls' favor. Third-quarter results, released after the close on Oct 21, showed revenue of about USD 6.06 billion, up 28% year on year. Earnings per share (EPS) came in at USD 2.62 and gross margin at about 64%. Data center revenue grew about 95% and now accounts for roughly 13% of the top line, while industrial revenue rose more than 40%. Guidance for the fourth quarter was USD 5.8 billion to USD 6.3 billion, above what the market expected. On Oct 26 the company priced USD 2 billion of senior unsecured notes in four tranches of USD 500 million each, carrying coupons of 5.000% to 5.750% and maturing between 2028 and 2036. Proceeds go toward part of the consideration for the Silicon Laboratories acquisition, and the notes are expected to settle on Nov 9. Sell-side opinion is split. Zacks upgraded the stock to "Strong Buy" on Oct 24, and Jefferies lifted its target to USD 300 on Oct 22. A MarketBeat tally from Oct 24 still put the consensus at "Hold" with an average target of about USD 311, roughly in line with where the shares trade. Barclays went only as far as USD 280 on Oct 22 and kept a "Neutral" rating. The disagreement is over how long the analog recovery lasts.
The tape is stretched. Price is above the upper Bollinger band and the band width is expanding, a sign that volatility and the slope of the advance have both picked up. The 6-day relative strength index (RSI) is above 80, the commodity channel index (CCI) has crossed 200, and the 6-day deviation from the moving average sits near 8.5%. Overbought readings of that size make a pullback after chasing the move a live risk. Turnover has now topped USD 2.2 billion for two sessions running, which gives the cross a base of steady participation.
Three things decide the next few sessions. First is the Federal Reserve's rate decision and the wording of its statement. The market broadly expects a hold, but there is no agreement on whether a hike returns in December. Second is the Philadelphia Semiconductor Index (SOX), which rose 2.82% on Oct 26 and saw AMD and other chip names lead again on Oct 27. Third is the Oct 30 ex-dividend date. The quarterly payout was raised 7% to USD 1.52, the 23rd consecutive year of increase.
The most direct risk is profit-taking after the overbought run. A session of heavy turnover that fails to lift the price, or a quick slide back below the 5-day moving average, would undercut the cross. Valuation is not cheap either. Trefis put the stock at about 39 times adjusted earnings on Oct 23, and semis trading at high multiples tend to take the first hit if rate expectations turn hawkish again and long-end yields climb. The near-term setup favors the bulls, because earnings and the chart are pointing the same way. Choppiness is just as plausible from here, though, and whether turnover stays above USD 2.2 billion is the cleanest test of how much force is behind the move.
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