Will Intel play catch-up?

Sep 26

INTC has vastly underperformed its peers for a long time, but there might be signs the stock will start to move in the right direction. There has been a lot going on with the company this last week, maybe the chart will show some improvement.

Price has broken resistance recently and closed above on Monday this week. It has since started building momentum, with indicators showing strength. MACD is rising, and On-balance-volume is confirming the uptrend. My first target would be for price to fill the gap created on Aug 2 when price dropped a whopping 25%. Once reached, we might see a slight pullback, however this should be temporary. Next speed bump might occur around $35.50 - $36.00 but that would be a 50% jump from the price today and will be more long term I believe, unless rumors of a takeover (or a massive investment) of the company becomes more solid. One more trigger one might want to wait for is the shorter EMA (i.e. 21) crossing the longer (i.e. 50).

Oct 4

Note

To be honest, I don't like how INTC has performed since my idea. It keeps underperforming its peers despite good news specifically related to the company, which is never a good sign. I get a feeling that investors are getting into the sentiment that not all players can make it, and of the lot they feel INTC is the less likely. From a trading perspective, if price breaks the blue support line in a definitive manner, I would get out of a long position and consider a short.

My initial idea was based on the underperformance of INTC compared to its peers. My belief now is that one of two scenarios might occur: A takeover, or a massive investment that will provide confidence (however this will take years to make an actual impact). The first will definitely push price up, the second might. The alternative is “business as usual”, and that is not looking too good at the moment. There is no real support before $17 and then $12.05 all the way from back in January 2009. It can happen!
Earnings are released October 24. Last quarter was a miss, my gut is on another miss.

So why the Long recommendation still? I feel a corporate action (read: heavy investment that matters, or a bid for parts of or the entire company) will have to happen. It not, I feel NTC will keep losing the battle. This might turn this idea into an investment case rather than a trade, so for traders, keep an eye on the blue line.

Oct 29

Trade closed manually

I am closing this. I feel INTC now has dropped the ball, there was an article in Yahoo! Finance today about how the company, and the CEO in particular, has been overly optimistic, and I fear there will be negative surprises in the upcoming earnings report. Might still be a takeover case, but that is only rumors and might take a while.