Don't Ignore This Chart!

Intel (INTC) Letting Its Chips Fall?

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Actually, this chipmaker's chart looks very strong, especially longer-term.  After a strong advance in late 2014, a negative divergence emerged and was followed by a topping head & shoulders pattern.  The measurement of that pattern - from the top of the head to the neckline -was roughly 17.8%.  Once neckline support was lost, the measurement is determined by another 17.8% decline, or a drop to roughly 24.66.  Several weeks ago, INTC found its bottom at 24.87, not far from reaching that measurement/downside target.  Now INTC is rebounding and it's doing so with nice relative strength vs. its peers and at a time when semiconductors have held relative trendline support vs. the S&P 500.  On Wednesday, INTC closed back above 30.00, an important short-term resistance level but is currently trading back beneath that level today.  On this weekly chart, we need to see a weekly close above 30.00 to trigger a buy signal.  In the meantime, more short-term weakness down to test recent price support near 28.00 could suggest building a long position as well.  Have a look at this 5 year weekly chart:

Happy trading!

Tom

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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