Tuesday, October 11, 2011

TXN Watch

Texas Instruments Inc. (TXN) has been climbing a channel since it bounced off of a low on Sept. 6, at $24.34, and has since touched the top of the uptrend twice in its journey to Monday's high of $30.15, an increase of 24%.

sym phase trend adx   200/50 40/10

The price today pulled back to within the trend channel but has risen intra-day.

The uptrend runs counter to the wisdom(?) of analysts, who tend to be somewhat bearish. However, return on equity is an impressions 28%, and the debt/equity ratio, 0.32, while higher than I like in a growth stock, is still not in the crippling range. Institutional ownership is 84%, so the big guys are on board.

TXN announces earnings after the close on Oct. 24, and goes ex-dividend on a 17¢ quarterly payout on Oct. 27.

The consistency of the upswing this past month has been impressive, but TXN in my book is a short-term ride. Given the analysts' negative views, I wouldn't want to hold across the earnings announcement.

If the price rises persistently above $30.15, it's a breakout and worth a bull play. The next upside resistance iat around $32, or 8% above the present level.

If it bounces lower -- perhaps below $29.25 on a down day -- then it may be worth a bearish swing play. The far side of the channel today is at $26.68, which is 8.7% below the present level.

For my account, I won't play it today, but I will consider it depending upon what happens Wednesday and Thursday.


  • phase: 20-day price channel phase, with green for bull trend, red for bear trend and yellow for neutral trend.
  • trend: Price direction, green for higher highs and higher lows, red for lower highs and lower lows, yellow for sideways, and grey for neutral or ambiguous.
  • adx: Average directional index location, indicating the strength, or the temperature, of the trend. Orange for 40 or greater, aqua (light blue) for 25 and up but below 40, magenta (light purple) for 20 and up but below 25, and brown for anything below 20. (Mnemonic: Orange for the overhead sun, blue for the surrounding sky, magenta for sunset on the horizon and brown for the earth.)
  • 200/50: The moving average cross, green for the 50-day ma above the 200, red for below and yellow for closely aligned.
  • 40/10: The moving average cross, green for the 10-day ma above the 40, red for below and yellow for closely aligned.

About my trading methods

Read a detailed explanation of my analysis method, including trading rules.


Tim Bovee, Private Trader tracks the analysis and 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.

The trader’s greatest sin is inaction. Sleeper, awake! Seize the Nietzchean moment. Roll out of bed and trade.

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