Trade of the Day: SWKS Stock Looks Ready to Fly Higher

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Skyworks Solutions Inc (NASDAQ:SWKS) — Shares of SWKS stock soared as much as 4% early Wednesday following a better-than-expected quarterly earnings report from Apple Inc. (NASDAQ:AAPL), despite finishing the day up just 0.9%.

The wireless semiconductor company is a major supplier for the iPhone, and S&P Capital IQ Equity Research anticipates higher orders for Skyworks ahead of the iPhone 7 launch, which is slated for Sept. 16. Its analysts also note higher demand from Samsung and China. While Capital IQ rates SWKS stock a “Hold,” it has a 12-month price target of $75 on shares, which is nearly 13% above recent prices.

For the company’s fiscal 2016 year, which ends on Sept. 30, analysts anticipate earnings growth of 5% to $5.53 per share, and another 11% in fiscal 2017 to $6.13.

Turning to the chart, we can see that SWKS stock is still in a downtrend following a top at just under $113 made in June 2015. But that trend is under attack. A double-bottom in February and July below $60 and a successful test of the 50-day moving average around $65 this week on high volume suggest higher prices are in the future for SWKS stock.

Note the unsuccessful test of the 200-day moving average on July 21, which was followed by a gap down and then an increase in buying. This is a pattern often associated with a change in trend. A punch through the 200-day, currently at $71.08, and a run to the cluster of resistance at $76 to $78 appears to be in the cards.

Therefore, traders should look to buy SWKS stock on a pullback to $65 with a target of at least $75 for a potential return of more than 15%. Longer-term investors looking for more speculative plays should consider buying shares at the market price.

SWKS Stock Chart
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Article printed from InvestorPlace Media, https://investorplace.com/2016/07/skyworks-solutions-inc-swks-stock-trade-day-2/.

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