Skyworks’ stock volatility
Connectivity chip stocks aren’t very volatile and move in tandem with the market. These stocks have rebounded from the 2018 downturn and are increasing. Skyworks (SWKS) stock has shown some positive momentum in 2019. The stock has risen 22.5% YTD (year-to-date) after falling 28% in 2018. Skyworks’ stock performance is closer to Apple’s (AAPL) stock performance. Technical analysis looks at the stock price and trading volume to estimate the near-term price momentum.
Moving averages take the average of a stock’s prices over a certain period to understand which direction the movement is skewed. When the short-term moving average is higher than the long-term moving average, it shows technical strength.
Apple, Skyworks, and Integrated Device Technology (IDTI) are trading near their 50-day moving averages, which are greater than their 200-day moving averages. The moving averages indicate technical strength. Qorvo (QRVO) is trading above its 50-day moving average, which indicates that the stock is in an upward price movement. Qorvo’s three-month average trading volume of 1.28 million is way below Skyworks and Integrated Device Technology’s average volume above 2.0 million.
Qorvo’s upward price movement was due to a 7% increase in the stock price on March 21. The company’s trading volume increased to 2.5 million. The boost came after Goldman Sachs analyst Toshiya Hari upgraded the stock to “buy.” Skyworks stock also rose 5.2% due to Qorvo’s upgrade. However, the trading volume was near the average of 2.5 million.
The RSI measures the intensity of investors’ sentiment on a scale of zero to 100. An RSI that’s less than 30 indicates that the stock is oversold, while an RSI greater than 70 indicates that the stock is overbought. When a stock is overbought, the price will likely see some correction until the trading volumes return to normal, which means the RSI falls between 70 and 30.
Skyworks and Apple have an RSI of around 50, which indicates that the trading volume is normal. Qorvo’s RSI rose to 79 on March 21 after the analyst upgrade. Since then, the stock has seen some correction. The stock fell 4.5% on March 21–26. Currently, the stock is trading at an RSI of 58.
There’s technical strength in the connectivity chip segment. These stocks will likely grow gradually through 2019 with some positive or negative hiccups.