Texas Instruments Incorporated: More Upside for TXN Stock?
Important Chart for TXN Stock
What if I told you there was a way to simplify the investing process and that Texas Instruments Incorporated (NASDAQ:TXN) stock fits the criteria of simplified investing—would that catch your attention?
Well, it should…
If you have ever made an investment, you likely realized that buying is the easy part. It’s knowing when to sell that’s the biggest problem. This is because as people, investors tend to have emotional biases. These biases cause us to sell our investments too quickly, missing out on potential profits, or to hold investments for too long, riding them up and back down again. So what’s the secret?
It’s not a secret by any means; rather, traders have been using this technique for hundreds of years. It is a simple technique of following the trend. This also adds a systematic approach to you investing model.
By examining TXN stock, I will show you how trends reassert themselves with continuation patterns. This will help you stay invested in your winners.
TXN stock has been exhibiting bullish tendencies since the recent bull market began in 2009.
Chart courtesy of www.StockCharts.com
The cup-and-handle pattern on the above chart emerged soon after the 2009 financial crisis. This pattern signifies a bullish continuation of the current trend. The projected price objective of this pattern is the depth of the head projected above the horizontal resistance. Based on these criteria, we get a $52.00 target for TXN stock.
Following this bullish continuation pattern, Texas Instruments shares rose to $58.00 apiece in an almost uninterrupted straight line. This supports the bullish price objective triggered by the pattern. The chart below illustrates its predictive power.
Chart courtesy of www.StockCharts.com
Stocks that are trending tend to have similar patterns that keep repeating in the current trend. You will notice that on the chart above, another cup-and-handle pattern has executed. It is projecting a price objective of $74.00. This target is not far off of the $80.00 price point TXN stock hit during the dotcom bubble. The recurrence of continuation patterns reaffirms the current trend. Higher prices are expected as the bull market rages on.
All the evidence provided thus far is for reasons to remain in TXN stock. So, the question remains: what would cause investors to exit?
The answer to that question is easy. When the trend changes, if shares start making lower lows, it is time to sell. If the long-term trend line breaks, it is time to sell.
The following 10-year TXN stock chart portrays the long-term trend.
Chart courtesy of www.StockCharts.com
The trend is clear and defined. As long as the shares remain above this trend line, the bull market will remain intact. If shares fall and close below the long-term trend, it signifies that the trend has changed. A change in the trend is a great reason to step aside and sell a long position, plain and simple.
The Bottom Line on TXN Stock
Using a systematic approach to investing can alleviate investors of the many pitfalls they come across. Timing of your entry and exits points can be simplified by using and adhering to certain rules.
TXN stock is a perfect example of a buy-and-hold investment that can be managed effectively using the stock’s price chart. At the current juncture, all signals are pointing toward higher prices as the path of least resistance is up. At the moment, in TXN stock, the trend is indeed your friend.
