Tuesday, October 13, 2009

Intel (INTC) in an Interesting Spot

An interesting setup for Intel (INTC) as we await for earnings after the bell; in a normal economic environment I really don't pay much heed to this company since it's essentially a silicon based cyclical, but in this type of environment - as investors grasp at hopes the government will successfully reinflate the real economy with handouts, stimulus, and money printing - Intel will be closely watched.

A lot of cross currents here - the stock has rallied 6 straight days (as has the S&P 500), and unlike last quarter when its results were a surprise to the market, much of what we read now is an expectation that Intel will surpass analyst estimates. Really the whole analyst game has become a joke - set the bar low, crush the number... even if it means profits are down 30-35% year over year... and we rally.

Technically, the stock looks almost identical to the S&P 500 with a double top formation - although Intel's is spread over a much longer time frame. So from here, it's really just the same game plan as the market as a whole.

Either (a) good news sets a springboard for a double top breakout, or (b) some technical damage is created as the stock (or the larger index) is turned back. One could expect Intel to beat expectations on Asian demand, weak US currency, and analysts who seem to be without a clue - but the question is will they beat it enough to create a tangible surprise, rather than a 'fake surprise'. We'll know in 8 hours...

No position

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