Texas Instruments Incorporated (NASDAQ:TXN) stock has been racing up the charts since taking a sharp bounce off its 200-day moving average in late May, with the shares hitting a record high of $131.80 on Oct. 1. The equity has pulled back slightly from this milestone, but history suggests new highs could be on the horizon.
Specifically, the chip stock is trading within one standard deviation of its 40-day moving average after a lengthy stretch above it, defined for this study as having traded above it 60% of the time in the past two months, and in eight of the last 10 sessions. According to Schaeffer's Senior Quantitative Analyst Rocky White, this signal has sounded 11 other times in the past three years, and the equity was up 4%, on average, one month later.
What's more, TXN has been one of the best stocks to own in the fourth quarter among S&P 500 Index (SPX) components over the past decade. Data from White shows Texas Instruments stock has averaged a gain of 9.1% in the final three months of the year, with nine of the 10 quarterly returns positive.
Bull notes could help fuel more upside for Texas Instruments stock, too. Although the equity is boasting a 37% year-to-date gain, 14 of 24 analysts still say the security's a "hold" or "strong sell." Plus, the average 12-month price target of $129.37 is roughly in line with the equity's current perch at $129.57, up 0.7% today on Apple (AAPL) tailwinds.
Continued short selling could translate into more buying power for the tech stock. Short interest fell 4.1% in the most recent reporting period to 18.74 million shares. While these bearish bets represent a low 2% of TXN's available float, it would take shorts more than four days to cover these remaining shares, at the average pace of trading.