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. With this renewed price strength, it will be interesting to see if Microchip Technology can maintain its momentum and exceed that threshold in the future.
While Microchip Technology recently broke out above a flat base, it has since fallen back below its previous entry point. 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. However, investors should 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 and semiconductor industry news, 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
