Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free weekly newsletter.
Intel (NASDAQ:INTC) — The world’s largest semiconductor chip maker has a confluence of positive signals currently that may offer a good long-side opportunity for traders. Besides the solid technical picture, the company currently sports a 7.5 times 2012 price/earnings ratio, a 4% dividend yield, and net cash on its balance sheet of around $10 billion.
The four-year weekly chart shows that despite the hard fall as of late, Intel is still more or less at the uptrend line dating back to early 2009.
On the 12-month daily chart, there is support near $19.50, but technical analysis 101 dictates that if a stock is below both its 50-day and 200-day simple moving averages, then the trend is not up. That is of course true, and as such, the trade I see setting up here is simply an oversold bounce rather than a long-term buy and hold.
On the close-up chart dating back to early June, note the oversold levels in the slow stochastics and the cluster of long candles in the gray area.
Like I mentioned yesterday, given the environment we are in, it is difficult to make many longer-term trades based on technicals until the downward momentum slows down.
The trade I see setting up here is to go long INTC stock near $19.90 with a stop at $19.50 and a target near $21.50.
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