Good technical signals and a possible breakout for ANALOG DEVICES INC.

A possible breakout setup was detected on ANALOG DEVICES INC (NASDAQ:ADI) by our stockscreener. A breakout pattern is formed when a stock consolidates after a strong rise up. We note that this pattern is detected purely based on technical analysis and whether the breakout actually materializes remains to be seen. It could be interesting to keep an eye on NASDAQ:ADI.

Technical analysis of NASDAQ:ADI

Every day ChartMill assigns a Technical Rating to every stock. The score ranges from 0 to 10 and is determined by evaluating multiple technical indicators and properties.

We assign a technical rating of 8 out of 10 to ADI. Although ADI is only a medium performer in the overall market, the technical picture looks good in both the medium and short term time frames.

• Both the short term and long term trends are positive. This is a very positive sign.
• ADI is currently trading in the upper part of its 52 week range. The market is still in the middle of its 52 week range, so ADI slightly outperforms the market at the moment.
• In the last month ADI has a been trading in the 159.58 - 172.03 range, which is quite wide. It is currently trading near the high of this range.
• Prices have been consolidating recently, this may present a good entry opportunity.
• When comparing the yearly performance of all stocks, we notice that ADI is one of the better performing stocks in the market, outperforming 85% of all stocks. However, this overall good ranking is mostly due to the recent strong move.
• ADI is an average performer in the Semiconductors & Semiconductor Equipment industry, it outperforms 66% of 107 stocks in the same industry.

How does the Setup look for NASDAQ:ADI

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NASDAQ:ADI this score is currently 10:

ADI has an excellent technical rating and also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 171.91. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 167.94, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for ADI in the last couple of days, which is a good sign. Very recently a Pocket Pivot signal was observed. This is another positive sign.

Trading breakout setups.

One way to play this would be to wait for the actual breakout to happen and buy when the stock breaks out above the current consolidation zone. A possible place for a stop loss would be below this zone.

This article should in no way be interpreted as trading advice. You should always make your own analysis and trade or not trade based on your own observations and style. The article is based purely on some technical observations.

Every day, new breakout setups can be found on ChartMill in our Breakout analyzer.