The September 2013 rally has so far taken with it many of the more important stocks and sectors, including the semiconductor stocks. On September 5th I discussed the bullish posturing on the charts of Micron Technology Inc (MU) HERE. The stock has since done what it at the time looked like it would do, and that is rally to the tune of more than ten percent. While Micron Technology Inc (MU) continues to act respectably, I am now finding better risk/reward on the long side of Intel Corporation (INTC).
The Market Vectors Semiconductor ETF (SMH), of which Intel Corporation (INTC) is a part of, broke past important resistance on Monday September 16th, and thus to new year to date highs. Intel Corporation (INTC) on the other hand remains roughly ten percent below its year to date highs from early June, but has show promising strength over the past two weeks.
The below chart of the stock shows that broadly speaking it continues to respect its November 2012 up-trend and on the upper end likely has some resistance at the down-trend line that dates back to May 2012. For now, Intel Corporation (INTC) bounced nicely off its 200 day simple moving average (red line), which at the time in late August also coincided with the November 2012 up-trend.
Closer up, on the stock’s daily chart it currently found resistance at its 100 day simple moving average (blue line), which also coincides with horizontal resistance dating back to a down-gap from July 18th. Should the stock be able to overcome this immediate-term level of resistance around the $23.60 area, it stands a good chance of moving toward $24.25 as a next upside target, where ti would also fill the July 18th gap as a next order of business. Beyond there, the $25 – $26 area serves as another upside target for traders to keep in mind.
As usual and in order to see both sides, any major reversal lower from current price levels would clearly be bearish and should be a notable signal to hold off on trading the stock from the long side until better support is found.
