This AAPL Supplier Is About To Go Higher
Xilinx (XLNX) reported better than expected earnings results last night, and this is giving a boost to a wide range of tech stocks.
This is not the time to buy XLNX, but it does shed light on a few other stocks in this sector that are near buy points.
When the market turns up from a correction low as it has over this last month, it’s good to have a mix of trade types.
The last couple days I’ve focused on stocks that have been in strong trends, WDAY, being the best example of that.
Today, I’m highlighting Skyworks Solutions (SWKS), which is the opposite of WDAY. It’s in a low base.
On January 3rd, SWKS got hit on big volume because it’s a supplier of parts to AAPL and AAPL announced production cut backs.
However, that bad news turned out to be a big volume low from which the stock immediately rallied. This looks like a spike low.
Now it’s spent two weeks consolidating at its 50-day moving average. If it can breakout over $71.25, this pattern suggests it could run to $75 quickly, and potentially $80.
Wait for a it to break over $71.25 before considering any long trade.
As I’ve been advocating, I’d keep tight stops in this market environment. If it breaks out it should just go. So my stop would be under $68.50.
I would not hold it into its earning report on Feb 7th, unless it has run up over $75 by that point. Even then, earnings reports are always a gamble.
Rick Nartarian, Chief Investment Officer
The American Investor Daily