On Monday, Microchip Technology (MCHP) received a positive adjustment to its Relative Strength (RS) Rating, increasing it from 67 to 76. This rating, from Investor’s Business Daily, ranges from 1 to 99 and tracks market leadership. It shows how a stock’s price performance over the past year compares to other stocks in the database. Historically, top-performing stocks typically have an RS Rating of above 80 in the early stages of their uptrends. It will be interesting to see if Microchip Technology can maintain its renewed price strength and exceed that threshold in the future.
Recently, Microchip Technology broke out but has since fallen back below its previous entry point from a flat base. If a stock rises above a buy point and then drops 7% or more below that level, it is considered a failed breakout. In such cases, it is recommended to wait for the stock to form a new base and breakout before considering an investment. It is important to note that the most recent consolidation is a later-stage base, which typically carries higher risk.
In its last quarter, Microchip Technology reported negative growth for both sales and earnings. The company is scheduled to release its next quarterly results around May 6th. Currently, Microchip Technology holds the No. 5 rank among its peers in the Electronics-Semiconductor Manufacturing industry group, with Taiwan Semiconductor ADR (TSM) ranked as the top stock in the group.
To stay informed about chip stocks, semiconductor industry news, and improving technical action in stocks, it is advisable to regularly check resources like Investors Business Daily. By using tools like the Relative Strength Rating and Relative Strength Line, investors can assess the momentum and potential of individual stocks. Joining an IBD Meetup Group can also be a valuable resource for those looking to enhance their investing skills