Analog Devices (ADI) Leads the Technology Sector’s Fall


In the technology sector, companies in the semiconductor industry fell sharply on November 23. These included Analog Devices (ADI), Lam Research Corporation (LRCX), Linear Technology Corporation (LLTC), and Microchip Technology (MCHP), which fell 4.4%, 1.8%, 1.8%, and 1.7%, respectively, on the day. The beta of these stocks is above 1, which means that these stocks are more sensitive to broad market movements and hence fell more sharply than other stocks in the technology sector. The following graph compares the stock price movements of Analog Devices (ADI) and Microchip Technology (MCHP) since October 2015.

Analog Devices (ADI) Leads the Technology Sector’s Fall

A beta of more than 1 suggests a stock is volatile. ADI and MCHP have betas of 1.2 and 1.1, respectively. On November 23, ADI traded at $56.80, which was below its moving averages. The 100-day, 50-day, and 20-day moving averages of ADI on November 23 were $59, $59, and $60, respectively. The trading volume of the stock surged to 7,019,464 shares from the previous day’s volume of 3,043,954.

Analysts’ stock price target for ADI is set at $67.00, indicating potential for a rise. However, as the trading price of the stock was below its moving averages, a rise in the stock is uncertain. The relative strength index, or RSI, of the ADI is 49, implying that the stock is neither oversold nor overvalued. The stock has received 19 “buy” and 11 “hold” recommendations and only one “sell” recommendation. The stock is rated as A- with a stable outlook.

Other key stocks of the technology sector

Intuit (INTU), which led the technology sector on the previous trading day after the company beats its quarterly expectations, fell 2.1% on November 23. The stock was anticipated to fall as investors consolidated their gains.

Apple’s (AAPL) rally was stalled on November 23, as the stock fell 1.3% on the day.

In the next part of this series, we’ll look at the top and bottom stocks of the SPDR S&P 500 ETF (SPY) on November 23, as well as the performance of other sectors.