How to Time Your Entry into Intel (INTC)

07/07/2009 10:22 am EST

Focus: STOCKS

This large-cap growth stock and manufacturer of semiconductor chips entered a bear market in September 2000 when it was priced above $75 per share. It bottomed out below $17 in early 2006.



Click to Enlarge

From July 2006 to December 2007, it recovered to more than $28 before succumbing to selling, which eventually drove it to $12.

On March 13, at about $13, I wrote, "This traditional technology growth stock appears to have formed a solid base at $12, but in order to break from the base it must close above the downtrend and Thursday's (March 12) high of $14.60.

"If it breaks out, the initial target is $18, but the trend will have changed to intermediate up, and that could attract more long-term buying."

On June 10, at $16.45, I wrote, "Intel has not only driven above $14.60, but also established a base above its 200-day moving average, flashed a Collins-Bollinger Reversal (CBR) buy signal, and completed a gold cross—all signs of a long-term change in trend. Our trading target is revised upward to $22."

The target is still $22, but in light of the current overall market conditions, I'd wait for a pullback to below $16 before taking or adding to positions in Intel (INTC).

By Sam Collins of OptionsZone.com