ON Semiconductor (ON) Extends Rally on CEO Appointment

ON Semiconductor Corporation (ON) shares rose nearly 4% during Tuesday’s session after KeyBanc, Piper Sandler, Needham, and Mizuho analysts reacted favorably to the incoming CEO Hassane El-Khoury.

Key Takeaways

  • ON Semiconductor shares rose about 4% during Tuesday’s session after several analysts favorably weighed in on its incoming CEO.
  • The stock moved toward overbought territory following the move higher, but the intermediate- and long-term trend remains higher.

KeyBanc analyst John Vinh believes that El-Khoury’s prior success as CEO of Cypress Semiconductor makes him well suited to lead ON. In addition, the analyst notes that the company is already in a favorable position amid a broader recovery and its exposure to secular growth in auto, industrials, 5G infrastructure, and cloud computing.

At the same time, Needham analyst Rajvindra Gill maintained the firm’s Strong Buy rating on ON stock and raised its price target to $38.00 per share, saying that El-Khoury successfully shifted Cypress Semiconductor’s strategic focus to higher-end markets while divesting or under-investing in non-core areas – moves that he could replicate at ON.


From a technical standpoint, the stock broke out from upper trendline resistance to fresh highs following the bullish analyst calls. The relative strength index (RSI) moved further into overbought territory with a reading of 77.87, but the moving average convergence divergence (MACD) resumed its bullish trend higher. These indicators suggest that the stock could see some consolidation before experiencing a further move higher.

Consolidation in technical analysis refers to an asset oscillating between a well-defined pattern of trading levels. Consolidation is generally interpreted as market indecisiveness, which ends when the asset’s price moves above or below the trading pattern.

Traders should watch for consolidation above trendline support levels at $31.00 over the coming sessions. If the stock breaks down from those levels, traders could see a move toward trendline support at around $30.00 or Fibonacci support at $29.53. If the stock rebounds higher, traders could see a move to fresh highs toward higher analyst price targets.

The Bottom Line

ON Semiconductor shares moved sharply higher during Tuesday’s session after analysts reacted to its new CEO appointment. Give El-Khoury’s success at Cypress Semiconductor in the past, the analysts are hopeful that he will bring the same successes to ON. The stock moved into overbought territory following the move, but the long-term trend remains bullish.

The author holds no position in the stock(s) mentioned except through passively managed index funds.

Source link

Recent Articles

U.S. Concerned About Ongoing Confrontations in Jerusalem

The U.S. is “extremely concerned” about ongoing confrontations in Jerusalem including on the Temple Mount and in Sheikh Jarrah, State Department spokesperson Ned...

Cramer’s week ahead: The stock market can keep climbing ‘now that the Fed remains our friend’

The stock market rallied Friday as investors reacted to the worse-than-expected April jobs report, which indicates the Federal Reserve's easy policy is unlikely...

A joke cryptocurrency has risen more than 26,000% in the last six months, outpacing nearly every other investment

Dogecoin, the cryptocurrency branded after a viral dog meme from years ago, hit a new all-time high Friday afternoon. It now has a...

N.J. Mulls Cash Incentives; U.K. to Ease Travel: Virus Update

We're tracking the latest on the coronavirus outbreak and the global response. Sign up here for our daily newsletter on what you need...

The 6 recent Android 12 leaks we’re most excited to see

Android 12 is still months away from its official rollout (likely in September), but that hasn't stopped a torrent of new leaked features...

Related Stories

Leave A Reply

Please enter your comment!
Please enter your name here

Stay on op - Ge the daily news in your inbox