The House passed the debt ceiling deal last night, and the vote wasn't all that close. Some headlines made it seem doubtful, but numbers don't lie. Three out of every four voters in the House sided in favor of the bill. The initial reaction from equity futures was a yawn as we now focus on the Senate vote. Again, I believe this will get across the finish line.
Until yesterday, Intel (INTC) seemed to be the odd man out in the recent semiconductor rally. Wouldn't you know it, but Intel charged higher on a day when many semiconductors pulled back in a reasonably decent way from recent highs.
Don't get me wrong; it wasn't random. Nvidia (NVDA) sparked some speculation about the name with comments alluding to the possibility the two could work together.
I own Intel. I owned it long before yesterday, and barring a drastic change in its business, I'll own it long after the close today.
But there's a chance I may make an additional move, adding some to my trading account, which I treat separately from my long-term portfolio.
Just a couple days ago, Intel looked dead. Broken. Forgotten. The stock gapped below support and the bears gained the upper hand but couldn't hold it.
Fast forward a couple days and now we're staring a massive reversal in the face. Intel went from breakdown to breakout. In a market that currently loves momentum and semiconductors, Intel offers both, and at a valuation far below many of the recent winners. There's a reason for that, as Intel seems to have lost a step against its competition over the past few years, but we're talking about a potential trade here. That's short term. That's days.
Traders in this market have gleefully and greedily set aside long-term fundamental considerations to hop on the short-term momentum trade bandwagon. Intel shares have bounced from $27 to $32 in only three trading days, so the best move here for me is watching for a pullback below $31, then looking to buy on the way back up. I expect some resistance around $33.
