GET DAILY SIGNALSMicrochip Technology trending higher, but fundamentals are mixed
The semiconductor industry has been at the center of the trade discussions between China and the U.S. Intellectual property rights are a major sticking point between the two countries. On November 25, China hinted at stricter rules to protect intellectual property rights and chip companies jumped as a result.
One particular chip company I am watching is Microchip Technology (Nasdaq: MCHP). The stock has been trending higher, but there are some concerns when it comes to the company's fundamentals. Looking at the chart first, we see on the daily chart how the stock has moved significantly higher since late May. The stock did pull back in the first part of November, but it looks like it has reversed course at this point.
We see how the daily stochastic readings dropped in to oversold territory in the last few weeks, but the indicators have turned higher and made a bullish crossover on November 22. The indicators were in oversold territory and made bullish crossovers in May, early August, and late August, and each time the stock rallied. This particular setup looks more like the round pattern from May than the V-shaped patterns in August.
While the char looks good, there are some concerns regarding the fundamental performance of the company. Microchip has seen its earnings grow by 25% per year over the last three years while sales have grown by 25% as well. One problem comes from the third quarter earnings report which showed that earnings fell by 9% and sales dropped 7%. Analysts expect earnings to fall by 15% on the year with sales being down an estimated 4.9% for the year.
The company's management efficiency ratings are really strong with the return on equity at 36.8% and the profit margin is at 30.4%.
Looking at the Fundamental Analysis Overview from Tickeron, Microchip only has one area where it is ever so slightly above average. The Profit vs. Risk Rating is at 41 which indicates well-balanced risk and returns. The average Profit vs. Risk Rating for the industry is 67, placing this stock slightly better than average.
The Tickeron Price Growth Rating for Microchip is 50, and that is the midpoint for the ratings. A rating of 1 indicates the highest price growth while a rating of 100 indicates the lowest price growth. The rating measures how the stock price has grown over the past year compared to S&P 500 components.
The SMR rating from Tickeron is 56, indicating strong sales and a profitable business model, but it is slightly below average. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 74 indicates that the company is slightly overvalued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization.
The PE Growth Rating for Microchip is 100, pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents. A rating of 1 indicates highest PE growth while a rating of 100 indicates lowest PE growth.
The sentiment indicators for Microchip are mixed with extreme bullish sentiment from analysts and extreme bearish sentiment from short sellers. There are 22 analysts covering the stock with 18 "buy" ratings and four "hold" ratings. This puts the buy percentage at 81.8% and that is well above average.
The short interest ratio is a whopping 14.0 and that is one of the biggest short interest ratios I have seen lately. The average short interest ratio is around 3.0. If the stock rallies, this high short interest could add fuel to the fire as the short sellers can add buying pressure as they scramble to cover their positions.
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Harry Richardson — Algorithmic Trader & Strategy Developer Harry is an algorithmic trader specializing in impulse and breakout trading strategies across cryptocurrency and equity markets. With more than 10 years of experience in developing automated trading systems, he focuses on building structured algorithms designed to capture momentum while maintaining strict risk control. His approach combines quantitative analysis, real-market execution, and continuous performance monitoring. Vitalii prioritizes risk management, drawdown control, and strategy stability over short-term optimization, ensuring algorithms are adaptable to changing market conditions. He has developed and tested hundreds of automated strategies, working extensively with live trading environments, forward testing, and portfolio-level algorithm management. His work centers on transforming trading ideas into fully operational, scalable automated systems.
MCHP in downward trend: 10-day moving average broke below 50-day moving average on October 19, 2026
The 10-day moving average for MCHP crossed bearishly below the 50-day moving average on October 19, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 15 of 18 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 83%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 42 of 54 cases where MCHP's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 78%.
The Momentum Indicator moved below the 0 level on October 09, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on MCHP as a result. In 75 of 96 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 78%.
The Moving Average Convergence Divergence Histogram (MACD) for MCHP turned negative on October 09, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 46 similar instances when the indicator turned negative. In 38 of the 46 cases the stock turned lower in the days that followed. This puts the odds of success at 83%.
MCHP moved below its 50-day moving average on October 22, 2026 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where MCHP declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 76%.
The Aroon Indicator for MCHP entered a downward trend on September 24, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
Following a +3.67% 3-day Advance, the price is estimated to grow further. Considering data from situations where MCHP advanced for three days, in 193 of 288 cases, the price rose further within the following month. The odds of a continued upward trend are 67%.
MCHP may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron Price Growth Rating for this company is 57 (best 1 - 100 worst), indicating steady price growth. MCHP’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 82 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (6.233) is normal, around the industry mean (6.022). P/E Ratio (108.897) is within average values for comparable stocks, (20.769). Projected Growth (PEG Ratio) (0.233) is also within normal values, averaging (3.761). Dividend Yield (0.025) settles around the average of (0.012) among similar stocks. P/S Ratio (7.446) is also within normal values, averaging (45.794).
The Tickeron SMR rating for this company is 82 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 95 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. MCHP’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 78, placing this stock worse than average.
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General Information
a manufacturer of microcontrollers for high volume embedded control applications
Industry Semiconductors
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