Feb 28, 2012

Intel Nears Peak



Intel is one of the blue chips in technological index NASDAQ. Company, with its size and solid fundamentals usually is considered to be value investment generating moderate returns. With its low volatility and repeated price patterns could be profitable choice for analysts and investors.

In regard to the price predictability there is interesting cycle in INTC price over last 3 years. Here similarity with Google seasonal pattern do exist. Closer look at the chart reveals that during the 2010 and 2011 bullish markets Intel has touched its bottom in September both years. As 2009 market appeared to be extremely bullish the uptrend started few months earlier but it is still consistent with the pattern observation. After bottom has been touched in the autumn seasons the following positive trend lasted until April-May. The evidence that INTC registers its price peak during the spring is clear – 2010 ceiling has been registered in April, the 2011 one – in May. Cycle length is approximately 240 days in both cases. The latest cycle started exactly in Sept 2011 now probably reaches the roof as the chart shows stall signals. One signal is the consolidation under the long term resistance (formed by the long term parallel channel) around 27$. Another stall supportive fact is that the resistance was broken but the price did not sustain that level above and now we are trading back in the channel. In addition trend reversal signal has been spotted - the divergence between share price and MACD histogram (moving average convergence divergence). Those trend reversal signs are strong, however the timing is important here. Since the beginning of September 2011 190 days have passed. Considering the cycle length of 240 days we still have room for the price to stall or even to grow before trends lower.
   
Last three years Intel showed repeating price patterns
All mentioned above facts lead to the assumption that the pattern showing early autumn bottom and spring peak could be repeated again and probably the turning point is close.

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