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New Play - Tech Stocks
Sunday, January 23rd, 2005

Short (Bearish) Play


  Intel Corp - INTC
close: 22.42 change: -0.16 stop: 23.01

Company Description:
Intel, the world's largest chip maker, is also a leading manufacturer of computer, networking and communications products. (source: company press release)

Why We Like It:
We like INTC as a bearish candidate due to its technical weakness pure and simple. The stock has been stuck in a bearish triangle with support near $22.30 and a consistent trend of lower highs since it peaked in November. The company reported earnings that were above estimates and guided higher going forward but even this good news couldn't spark a breakout. Now with the NASDAQ hitting new lows for the year and the NDX-100 bullish-percent rolling over into a bear-alert condition we suspect that the tech sector has more weakness ahead. We are going to use a TRIGGER to catch the breakdown in shares of INTC. The pattern "should" produce a downside breakdown pretty soon because the stock price is coiling into a tighter and tighter range. We want to use an entry point at $22.24, which would be a new three-month low and a breakdown through support. More conservative traders may want to wait for a drop under its 100-dma and the $22.00 level before considering positions. The P&F chart doesn't show any support until the $19.50 region so we're going to target a decline into the $20.50-20.00 range.

Annotated Chart:


Picked on January xx at $xx.xx <-- see TRIGGER
Gain since picked:      - 0.00
Earnings Date         01/11/05 (confirmed)
Average Daily Volume:      240 thousand

Link to Current Quote INTC   NEWS   Zacks on INTC

 

 

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