Watch These Texas Instruments Price Levels as Stock Plunges on Weak Profit Outlook
The company, whose chips serve customers in most sectors across the economy, struck a more cautious tone than the previous quarter, telling analysts on the earnings call that the auto market remains subdued and the risks of new tariffs add demand uncertainty.
Prior to Wednesday's decline, Texas Instruments shares had gained 15% since the start of the year, boosted by broad market optimism about chip demand and the company's plans to expand its U.S-based chipmaking factories. The stock was down 13% at around $186 in afternoon trading.
Below, we take a closer look at the Texas Instruments chart and apply technical analysis to identify price levels worth watching out for.
Shares Retraced Ahead of Earnings
After plumbing a low in early April, Texas Instruments shares trended sharply higher before running into overhead selling pressure earlier this month near last November's peak.
The price continued to retrace in recent weeks ahead of the company's quarterly results in a move that coincided with the relative strength index retreating below its overbought threshold.
Let's identify important support levels to watch amid the potential for further earnings-related selling and also point out overhead areas worth monitoring during possible recovery efforts.
Important Support Levels to Watch
The first lower support level to watch sits around $190, just above where the stock was trading Wednesday afternoon. It's worth monitoring if bulls can defend the closely-followed 200-day moving average and a brief period of consolidation that formed on the chart just after the mid-May stock gap.
A decisive breakdown below this level sets the stage for a drop to $172. Investors may look to accumulate shares in this area near the March trough and the high of a bullish wide-ranging day in early April.
Overhead Areas Worth Monitoring
During recovery efforts in the stock, investors should initially monitor the $206 area. The shares could meet significant selling pressure in this location near a multi-month horizontal line that connects a range of price action on the chart stretching from May last year to June this year.
Finally, a breakout above this area could see Texas Instruments shares retest overhead resistance around $220. Investors may decide to lock in profits in this region near the notable November and July peaks, with the latter marking the stock's record high.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.
As of the date this article was written, the author does not own any of the above securities.
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