Chipmaker Stock Pullback Could Reap Bullish Implications

ON Semiconductor Corp (NASDAQ:ON) stock is pacing for its fifth-straight daily loss, trading at its lowest level since early April. Year-over-year, ON has gained 38%, and the equity is now nearing a trendline with historically bullish implications. At last glance, ON is trading down 3% at $71.96.

 

The trendline in question is the stock's 260-day moving average. Per Schaeffer's Senior Quantitative Analyst Rocky White, ON is trading within 0.75 times the 260-day moving averages' 20-day average true range (ATR), after spending at least 80% of the previous two weeks and 80% of the prior 42 trading sessions above that trendline.

 

This even has happened seven other times in the last 10 years, after which the equity was higher one month later 80% of the time, averaging a 9.1% gain. From its current mark, this would put ON at $78.50.