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.