SWKS Watch

Industrial electronics company Skyworks Solutions Inc. (SWKS) plunged today without news, without warning and without a volume spike. It is trading more than 3.5% below Thursday's close.

	trend	sto	sto zone	pps	psar	macd	macd trend	ma20	ma200
SWKS $18.22

The fast stochastic and Person's Proprietary Signal both flipped into bear phase. The only technical suggestion that the rise was weakening came yesterday with a reversal of the macd trend. It remains in bull phase, but began moving toward the zero line.

That's not much warning, and technical analysis utterly failed to provide a decent exit signal for this position.

I first wrote about SWKS as a bull play on Aug. 27. And on Aug. 8, I sounded a caution that the fast stochastic had moved to bear phase. However, the move proved to be fleeting, so I don't count it as an actionable warning except for the most jackrabbity of traders.

Overall the, bull phase on Person's Proprietary Signal carried the price up by 7.4%.

On the Person's chart, the decline sent the price cutting through the midline, with a slight reversal as it approached the first weekly lower pivot.

Person's Table

	pps	pps open	upper pivot	lower pivot
SWKS $18.22		$18.80 sep10	$19.38 +6.4%	$17.06 -1.4%

Reversal Levels

• $19.29, +5.9% (high)
• $10.00, +4.3% (swing high)
• $18.22 <== You are here.
• $17.71, -2.8% (20-day ma)
• $16.54, -9.2% (swing low)
• $15.97, -12.4%

Bottom line: A drop of that magnitude with a Person's bear phase is an exit signal for me. Confirmation could be further technical deterioration, such as bear phase on the parabolic sar or the macd, or it could be the piercing of the 20-day moving average. I interpret the signal as meaning, Take the money and run.

Disclaimer

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

Abbreviations:

• pps - Person's Proprietary Signal.
• psar - Parabolic Stop and Reverse
• ma20 - 20-day moving average
• ma200 - 200-day moving average
• macd - Moving Average Convergence-Divergence
• sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways.
• sto: green for bull, red for bear.
• sto zone: green for overbought (80+), red for oversold (20-), yellow for neutral zone
• psar, pps, macd: green for bull mode, red for bear.
• macd trend: green for rising, yellow for sideways, red for falling.
neutral.
• ma20, ma200: green for above the average by more than 1%, red for below the average by more than 1%, yellow for within 1% either side of the average.