Intel Corporation designs, manufactures, and sells integrated digital technology platforms worldwide. It operates through PC Client Group, Data Center Group, Internet of Things Group, Mobile and Communications Group, Software and Services, and All Other segments. The company’s platforms are used in various computing applications comprising notebooks, desktops, servers, tablets, smartphones, wireless and wired connectivity products, wearables, transportation systems, and retail devices. It offers microprocessors that processes system data and controls other devices in the system; chipsets, which send data between the microprocessor and input, display, and storage devices, such as keyboard, mouse, monitor, hard drive or solid-state drive, and optical disc drives; system-on-chip products that integrate its central processing units with other system components onto a single chip; and wired network connectivity products.
Take a look at the 1-year chart of Intel (Nasdaq: INTC) below with the added notations:
INTC rallied nicely from March until its $35 peak (blue) and September, and then pulled back into October. Then, another rally took the stock to a new high at $37 in November, which is when the stock started testing the $35 level as support. INTC’s break of that $35 support in January probably means a bigger move lower has started.
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The Tale of the Tape: INTC has a key level at $35. A trader could enter a long position on a break back above $35 with a stop placed under the level. However, a short trade could be made instead if the stock rallies up to $35.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach