I recommended the long side of semiconductor maker Intel (INTC) back on July 27, writing that "... the charts and indicators suggest we could see higher prices in the days and weeks ahead. Traders who are long should continue to hold those positions. Raise stops to $31."
Since then Intel shares have zigzagged higher while staying above our stop recommendation. What should we do now? Let's review the charts again.
In the daily bar chart of INTC, below, I can see that the stock broke out to a new high for the move up while the broader market environment has been "challenging." Trading volume has weakened over the past three months and that is not what I like to see as an old-time chart reader.
The On-Balance-Volume (OBV) line continues to show strength from early March and tells me that buyers of INTC have been more aggressive than sellers. The Moving Average Convergence Divergence (MACD) oscillator just turned up above the zero line for an outright buy signal.
In the weekly Japanese candlestick chart of INTC, below, I see a mixed picture. The shares are grinding higher and trade above the rising 40-week moving average line. Weekly trading volume has not been expanding on the advance just like the daily histogram.
The weekly OBV line shows a saw-tooth rise. The MACD oscillator is above the zero line but the two moving averages that make up this indicator have not moved far away from each other.
In this daily Point and Figure chart of INTC, below, I see a positive picture with an upside breakout at $37.11 and a price target in the $50 area.
In this weekly Point and Figure chart of INTC, below, I see an upside price target in the $41 area.
Bottom-line strategy: INTC has moved higher but not in a dynamic way. This may not be an issue for patient investors but considering the speed which we have seen for some stocks on the rise, it is disappointing. Traders who are long INTC should raise stops to $34. I would have no objection to taking profits towards $41 and looking for other opportunities.
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