Don't Ignore This Chart!

Analog Devices Reverses Course at Key Retracement


Analog Devices (ADI) is a large semiconductor stock and a leader in the internet of things (IoT). The stock is in a long-term uptrend and recently broke short-term resistance to reverse a short-term pullback. 

First and foremost, the long-term trend is up. The stock hit a 52-week high in January, the 50-day EMA is above the 200-day EMA and the price is above the rising 200-day EMA. 

The stock has been moving sideways since November with a least five price swings greater than 9 percent. The decline from  mid-March  to early April marks the last downswing and the stock reversed this downswing with a breakout near 92 last week. 

The indicator window shows MACD turning up over the last six days and moving back into positive territory. This means the 12-day EMA is above the 26-day EMA and this reinforces the new short-term uptrend. 

Given the long-term uptrend and recent breakout, I would expect ADI to move to new highs in the coming weeks. A close below 90 would warrant a re-evaluation. 

Programming Note: On Trend is this Tuesday at 10:30AM on StockCharts TV. Tune in to see how the golden cross works with QQQ, IJR, MDY and DIA. I will also cover some chart setups. 

Plan Your Trade and Trade Your Plan.

- Arthur Hill, CMT

Senior Technical Analyst,

Book: Define the Trend and Trade the Trend
Twitter: Follow @ArthurHill

Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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