VSH Stock: Indicators Are in Bullish Alignment
I love the semiconductor space because the performance of the companies within this sector has been outright phenomenal. So when I stumbled upon Vishay Intertechnology (NYSE:VSH) stock, you can imagine how enamored I was to find out that it operates as a manufacturer in this space. Let’s get something clear. The reason why I like Vishay stock is because the indications on the stock chart are clear and concise. Therefore, applying an applicable investment strategy would not be a difficult task to take on. The fact that it operates in the semiconductor space only adds to my already existing enthusiasm for VSH stock. Currently, the indications on the stock chart are in bullish alignment, which is suggesting that the trend towards higher stock prices is likely to continue.
I have been using stock charts to generate views on potential investments for nearly 20 years. This method of investment analysis is called technical analysis and it is based on the notion that historical data points can be used to forecast what the future may bring. This method has produced great results, which I am sure many of my readers can attest to. What sets this method apart from the others is that the information it provides is timely, and therefore, extremely valuable for anyone who wants to apply a trading strategy.
The following Vishay stock chart illustrates the long-term indications that are creating a bullish backdrop, which is suggestive of higher VSH stock prices.
Chart courtesy of StockCharts.com
This VSH stock chart includes two indications that have created a bullish investing backdrop.
The first indication that is creating a bullish backdrop is the ascending channel, which is highlighted on the VSH stock chart. This technical price pattern is created using two upward-sloping trend lines that serve as levels of price support and price resistance. These levels act to contain the stock price as it oscillates in between them, staging a bullish advance. This appreciation of the stock price is characterized by a sequence of higher highs and higher lows, which creates the quintessential characteristic that defines all bullish trends.
As long as Vishay stock is contained within this ascending channel, I can only assume that the stock price will continue to appreciate. If I had any concerns with this investment, I would be watching for a break below support outlined by the ascending channel because this would suggest that the bullish trend towards higher prices had finally concluded, and therefore, a larger stock price correction is set to ensue. At the moment, I have no concerns with a correction ensuing because the second indication, which is also creating a bullish backdrop, remains in bullish alignment, which supports further gains.
The second indication, which is located in the lower panel of the Vishay stock chart, is the moving average convergence/divergence (MACD) indicator. MACD is a trend-following momentum indicator that uses the crossing of a signal line to suggest whether bullish or bearish momentum is influencing the stock price. The signal generated by this indicator is extremely important because momentum is needed to drive a stock, and this includes both advancing and declining issues.
In April 2016, a bullish MACD cross was generated, indicating that bullish momentum was influencing the trading action. This created a path of least resistance currently geared towards higher stock prices. Since this indication swung into bullish alignment, Vishay stock has appreciated by 44.04%. This indication remains in bullish alignment, so higher prices are still expected. If this indicator were to swing into bearish alignment via a bearish MACD cross, it would suggest that bearish momentum had once again gained a grip on VSH stock, and therefore, lower stock prices would be expected to follow.
As long as the MACD cross remains in bullish alignment and the stock is trading within the confines of the ascending channel, I can only assume that the bullish backdrop created by these indicators will continue to influence the stock price, and higher prices are likely to follow. At the moment, the only prudent view to hold on this investment is a bullish one.
From a timing standpoint, I would wait for the stock price to either test support outlined by the ascending channel, or a constructive setup pattern to develop within the ascending channel before I would assume a position in this investment.
Bottom Line on Vishay Stock
I am bullish on Vishay stock because a number of indications on the company’s stock chart suggest that this is the only view that is currently warranted. As long as these indications remain in bullish alignment, I will maintain a bullish view on VSH stock.