For several months now, we have been bullish on Intel (INTC). But understanding the “swings” is equally important when managing positions & risk.
Back in October we blogged about the INTC breakout, noting that longer-term investors may want to wait for a pullback.
Most of the time (note most) a long-term valid breakout OR breakdown will, before continuing on its path, come back to test the old support or resistance (polarity principle) for the “outside return” trade/investment. That is happening now with Intel’s stock price.
Here are a couple things to consider:
1. INTC broke out of the decade long basing pattern with regard to the broader market NYSE Index and rallied right up to our target ID’d months before the security flaw was found in their chips. However, the pullback has given up some relative strength, leaving bulls in limbo for now.
2. Using ‘basic’ neckline breakout projections the price went right up to our target. All of these targets were found months before the security flaw. A backtest of the breakout would be totally normal here BUT it needs to be successful to keep the bull case in line.
Intel (INTC) Weekly Stock Chart
If you look at the daily chart below you will see three highlighted price regions that, for now, are potential downside targets and areas to get long IF THE BREAKOUT IS REAL.
Only time will tell if this is a real bull market for Intel’s stock… one that could target into the mid-50’s. The polarity principle is a time tested technical analysis technique. The coming pullback into the former resistance will give us a very good idea if this bull market is real.
Thanks for reading.
Twitter: @BartsCharts
Author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
