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Unusual Pattern of the Day: Intel (INTC)

Unusual Pattern of the Day: Intel (INTC)

  • Special: This Market is Growing at the Fastest Rate Since 2006
  • Chipmaking giant Intel (INTC) hasn’t been the best performer in the tech space lately, but a number of factors are converging to suggest shares will head higher, even if rising market volatility continues.

    The first key technical factor pushing shares higher is the golden cross pattern. That’s a pattern where the stock’s 50-day moving average rises over the 200-day moving average.

    While a solid indicator in and of itself, it works better with another indicator in agreement. The second indicator? Moving average convergence divergence, or MACD. Both moving averages are rising and in tandem, suggesting the slow and steady gains in Intel will continue from here.

    Besides the strong technical signs right now, the company is moving towards increasing revenue and earnings after a slowdown last year. Shares are a relative value play right now, as they trade at just 13 times forward earnings. That’s nearly half the market’s average earnings multiple.

    Action to take: Traders looking for a stock play might still enjoy shares, as they still yield about 2.2 percent here.

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  • For traders, the June $65 calls should move in-the-money well before expiration. Last trading for about $4.30, traders can look for high double-digit gains on this trade, if not low-triple digit profits. As with any options trade, look to close out well before expiration to avoid declining time premiums.