Signal: Buy the Dip on This Struggling Semiconductor Stock

Texas Instruments Inc (NASDAQ:TXN) shares are up 0.6% to trade at $195.22 at last glance, on track for a third-straight gain. Prior to this rally, though, the semiconductor stock has lost 15.8% off a Feb. 11, all-time high of $231.32, and is down 8.1% in March alone. If past is precedent, TXN may be getting ready to stage its next rally, as its pullback testing a trendline with historically bullish implications. 

According to Schaeffer's Senior Quantitative Analyst Rocky White, Texas Instrument stock is within 0.75 of the 80-day moving average's 20-day average true range (ATR), after remaining above it 80% of the time in the last two weeks and in 80% of the last 42 trading sessions. This signal has occurred 16 other times during the past 10 years, after which the security was higher one month later 87% of the time, with an average 6.5% pop. A move of similar magnitude would place the stock back above $207. 

Short-term options traders learn bearish, suggesting an unwinding of pessimism could create additional tailwinds for TXN. This is per the security's Schaeffer's put/call open interest ratio (SOIR) of 1.19 that sits higher than 94% of readings from the past year.

Options look like an attractive route when weighing on the stock's next moves, per its Schaeffer's Volatility Index (SVI) of 35% that sits higher than 18% of all other readings from the past year. In other words, near-term option traders are pricing in relatively low volatility expectations.

What's more, TXN's Schaeffer's Volatility Scorecard (SVS) comes in at 99 out of 100. This suggests the equity has consistently realized higher volatility than its options have priced in.