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Technology Stocks : Texas Instruments - Good buy now or should we wait? -- Ignore unavailable to you. Want to Upgrade?

To: Ibexx who wrote (5406)	12/12/2000 8:42:49 PM
From: puborectalis	Respond to of 6180

Technical Analysis: Profit Taking May Hit Texas Instruments, But Positive Longer-Term Toronto, ONT, December 12 /SHfn/ -- Shares of global semiconductor company Texas Instruments [TXN] appear to have completed the four basic stages in a technical cycle. The stock seems to be back at Stage I, the basing stage. This consolidation stage could take weeks or months to complete before Texas Instruments' share price is ready to resume a major positive advance. At the present time, the company has reached its short-term upside target price. Having rallied to the upper envelope and Bollinger bands to a high of $53 on December 11, technical indicators suggest the stock could be vulnerable to some profit taking over the next seven trading days. The stochastic technical study measured an extremely overbought reading of approximately 96%, and has now started to turn down, suggesting that Texas Instrument's share price could falter at current levels. Trading on December 12 has the stock trying to push higher as it follows the strength in the Dow Jones Industrial Average [DJIA]. To midday, however the stock was unable to match Monday's high. If December 12's close is between Monday's high and low, the stock will have formed what is known as an "inside day." Inside days are signs of direction reversals. The stock could sell off to its 10-day moving average at $43 for a 16% correction. Longer-term, the chart suggests the stock may be trying to gather momentum to push higher. Texas Instruments is trading above its 50-day moving average, which is a positive sign, and both the 10-day moving average and envelope bands are pointing up in a positive direction. Its share price has also jumped out and away from the negative downtrend line, suggesting future positive performance. The stock would have to move above $60 to suggest that a new stage in the technical cycle has begun. The First Call consensus forecasts Texas Instruments' fiscal 2000 earnings will reach $1.25 a share and grow 24% to $1.55 in 2001. The stock is currently trading at a trailing 12-month price-to-earnings ratio (P/E) of 32, which is below its low historical P/E of 35 and well below its historical high P/E of 71. Any hint of upside surprises in December year-end earnings may see the company's share price higher after the short-term correction.