The first positive step was the large breakout gap from June 2009; when gaps like these don't close it indicates very strong demand for the stock. So Intel had a very good base to work with. The next 8 months followed with some low key buying in a modestly bullish advance. What also helped was a larger than usual correction in December 2009 (compared to its peers) which knocked out most of the 'weak hands'. However, this correction firmed demand for the stock around $19.00 with additional buyers ready to step in at $18.50.
The February advance increased the rate of buying until the development of a tight handle around $22.50. Narrow handles offer excellent risk:reward opportunities with the likely Wednesday morning gap set to break prices from this consolidation; protective stops can go on a loss of $22. Indeed, a snap break of $22 will give control to the bears over the near term and there may be short opportunity down to $19s.
As for upside potential, with a friendly market there is a measured move of $4 on offer for a target in the low $27s. But with the level of persistent buying we have been seeing in recent months it could follow through higher to challenge 2004 highs at $30s or 2001 highs at $32.
It should also be noted a strong performance from semiconductors is critical in the early recovery phase of an economy and Intel is leading the way in this regard.
I have created a Trading Idea for Intel on a push to $27 with a stop on a break of $22.
My Trading Strategies did not see any Profit exits yesterday, but there were a slew of new (and better) stop prices.
Developing a Strategy
Long Confirmation Entry for IBM (NYSE) at $128.5
Frankfurt High Winners
New Long Target and Stop for KRN (Frankfurt) at €41.88 (EoD): Target €46.20, Stop €39.90
Long Confirmation Entry for SOWF (Frankfurt) at €90.33
Long Exit at Trailing Stop for DPW (Frankfurt) at €12.64 (EoD)
FTSE Elm
New Long Target and Stop for JD. (London) at 717p (EoD): Target 824p, Stop 675p
India Oak
Short Confirmation Entry for VSNL (Mumbai) at INR288.7
Short Confirmation Entry for ACC (Mumbai) at INR956.9
Indian High Winners
Long Unacted Entry for JLVY (Mumbai) at INR1227.5 (EoD): Entry signal given, but exited position on same stock too recently (5) days ago.
UK Golden Brown
New Long Target and Stop for JD. (London) at 717p (EoD): Target 824p, Stop 675p
New Long Target and Stop for CARL (London) at 99p (EoD): Target 110p, Stop 90p
Long Unacted Entry for ACHL (London) at 56p (EoD): Entry signal given, but exited position on same stock too recently (8) days ago.
UK High Winners
Long Unacted Entry for 888 (London) at 103p (EoD): Entry signal given, but exited position on same stock too recently (3) days ago.
Long Entry for ACHL (London) at 56p (EoD)
New Long Target and Stop for JD. (London) at 717p (EoD): Target 787p, Stop 712p
New Long Target and Stop for CARL (London) at 99p (EoD): Target 110p, Stop 95p
US High Winners
Long Confirmation Entry for IBM (NYSE) at $128.5 (EoD)
US Uber Win
Long Confirmation Entry for IBM (NYSE) at $128.5 (EoD)
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