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 (NASDAQ: INTC) is still more or less at the up-trend 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 and 200 day simple moving averages 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 yesterdaz, given the environment we are in it is difficult to make many longer-term trades based on technicals until at least the downward momentum slows down. As such, the trade I see setting up here is to go long near $19.90 with a stop at $19.50 and a target near $21.50.