Analog Devices, Inc. (ADI) is a semiconductor company specializing in data conversion and signal processing applications. The stock traded to an all-time intraday high of $105.83 on Friday, Feb. 15. This is a strong momentum stock that has a string of beating analysts' earnings per share (EPS) estimates for 17 consecutive quarters.

Analog Devices stock closed Friday, Feb. 15, at $105.74, up 23.2% so far in 2019 and in bull market territory up 38% since trading as low as $76.62 on Oct. 26. I do not show any longer-term risky levels, and the weekly chart shows an overbought condition, which means that there's a high probability that my quarterly pivot at $102.07 will be tested before the end of March.

Analysts expect Analog Devices to post EPS of $1.28 when the company reports results before the open on Feb. 20. Analysts expect a year-over-year decline in earnings and revenue, making an earnings beat extremely important. Company guidance on new cutting-edge innovations will thus be important news. This will include next-generation wireless systems and networks.

The daily chart for ADI

Daily technical chart showing the performance of Analog Devices, Inc. (ADI)
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The daily chart for Analog Devices shows that the stock did have a 15% correction from its Dec. 3 market-weakness high of $94.62 to its Dec. 26 low of $80.08. The price action on Dec. 26 was a "key reversal," as the stock closed at $84.34 on Dec. 26, above the Dec. 24 high of $82.91.

On Dec. 31, the stock closed at $85.83, which was the input to my proprietary analytics. This resulted in my annual, semiannual and quarterly pivots at $89.65, 96.30 and $102.07, respectively. The Jan. 31 close of $98.86 generated my monthly value level at $90.06. For this week, I show a weekly risky level at $108.79.

The weekly chart for ADI

Weekly technical chart showing the performance of Analog Devices, Inc. (ADI)
MetaStock Xenith

The weekly chart for Analog Devices is positive but overbought, with the stock above its five-week modified moving average of $97.78. The stock is well above its 200-week simple moving average, or "reversion to the mean," at $75.51. The 12 x 3 x 3 weekly slow stochastic reading ended last week rising to 85.44, up from 80.24 on Feb. 8. These readings are above the overbought threshold of 80.00. A rise above 90.00 would make the stock an "inflating parabolic bubble."

Trading Strategy: Buy Analog Devices shares on weakness to my semiannual, monthly and annual value levels at $96.30, $90.05 and $89.65, respectively, and reduce holdings on strength to my weekly risky level at $108.79. My quarterly pivot should be a magnet on weakness.

Disclosure: The author has no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.