ON Semiconductor Corporation (ON) has created a compelling message for traders in the most recent trading. That message has grown stronger as the technical chart setup has developed into a more composite picture for the stock. This is the breakdown as we see it. There’s only one thing better than one tool when trading stocks and that is two tools. For many trading is all about fundamentals – their one tool to rule them all. But people in this camp miss out when they ignore the power of technical charts. Use them in addition to the fundamentals, and you become near-unstoppable.
The 50 and 200 SMAs for ON have created a marked trend which is now helping traders to make solid decisions regarding the stock. It’s a trend that is now unmistakable. Based on the trend levels presented by both indicators, the overall sentiment towards ON is best described as bullish. This trend has created a unified opinion across the trading floor and it is clear that the overall outlook for the stock is now established as positive. But it’s not just the outlook that’s being affected for the stock. Thanks to the consolidated opinion on ON, activity has also seen a pronounced trend. Under current sentiments the volume activity and subsequent trend has created a weak outlook from buyers and sellers. It wouldn’t be farfetched to imagine that, the current sentiments taking shape in light of the foregoing technicals for ON, presents a strong precedence for further sentiments of the same kind going forward. It is unsurprising in the case of ON, that the current trend has created some indifference among traders regarding the stock. In terms of consistency, it is clear that both the 50 and 200 SMAs have done their job in bring traders the overall trend-picture currently being seen for ON.
There is of course more to the tale than just what the SMAs have presented. For those added details, we can take a look at the Relative strength indicator (RSI) and Stochastic measures, both of which give deeper insights into the overall sentiment of buyers and sellers. SMAs will tell alert you to price direction, but when it comes to judging what buyers and sellers are doing, few indicators are better than RSI and the Stochastic. It as this level of technical data that a trader can determine whether a stock is currently overbought is oversold. The current picture for ON is of course very telling based on these two additional measures. Based on current readings, ON’s 14-day RSI is 59.13%. Taken on the standard scale of measurement for RSI, this suggests that ON is neutral, suggesting that the stock is relatively stable in terms of price movement up or down. The stochastic reading offers another solid measure of whether the stock is either overbought, or oversold. In the case of ON, Stochastic readings gathered over the last 30 days have created a score of 72.55%. This suggests ON is overbought at current levels.
Forming any judgment on ON purely through the technicals outlined above, whilst not fatal, may cause some problems. This is because there are other technical factors that help paint the overall picture for the stock. By this point in the analysis of ON, it is clear that other technical indicators are saying essentially the same things. Specifically the +0.92 has birthed a positive overall sentiment when measured over the previous 30 days or so of trading. Over the longer-term ON has outperform the S&P 500 by 54.7. This has, unsurprisingly, created higher volatility levels when compared with similar stocks of the same grade and class. Historical volatility is no less consistent. The historical volatility picture for ON is shown in the reading of 37.46%. ON has clearly shown its full hand by the overall input of these technical indicators. But there is one final measure that when added to the already rich mix, shows in full color what ON is doing. The indicator is the Average True Range, and based on the current 3.19 reading, ON is certainly worth paying attention to.
ON couldn’t be clearer in terms of the kind of action required in light of the picture shown by its technical indicators.