All in all, INTC has had a very busy year. The company has launched more than 13 new chips since the start of the year and has been investing heavily to speed up the design of new microprocessors in order to combat rival AMD. Definitely, their plan to come up with new chip architectures once every two years, rather than once every six years, has rewarded them significantly.
Noteworthy, Intel's Digital Health Group , which has invested heavily in information technology tools, is helping to cut healthcare costs and make the lives of doctors and patients easier. According to Louis Burns, head of the group, the trial at El Camino hospital in Mountain View,CA, is testing the safety and efficacy of INTC's chips to test computers with tablet displays among the nursing staff. The hope is to save doctors and nurses several hours per day in administrative work regarding the admission and discharge of patients.
Also at the Intel Developer Forum in San Francisco last month, Intel showed plans for technologies such as ``kitchen window'' computers, handheld computers that can be used in hospitals, and a laser-based communications technology that could improve the speed of computers by as much as 100-fold.
That said, however, here is the good news: for investors and traders, you'd be delighted to know that the slew of new chips and products have not yet been factored in the price of the stock. I adamantly believe that the rise in the share price from 12.00 to 16.00 is not the typical earnings run-up". For CEO Otellini to state that the bottom in the chip market has been accomplished, it's a bullish sign! It has been a tradition at INTC to issue a very conservative guidance.
From a technical perspective, INTC's behavior suggests a very bullish upside when mapped on the 3-month chart. The stock has traded in a perfect consolidation form from 12.75 to 15.15. The consolidation and basing patterns noted on the chart is highly suggestive of an ascending triangle formation. Thus, the resistance of 14.25 was breached and the stock remains well above that level, let alone all exponential moving averages.
Below are technical indicators based on a 3, 9, or 12 - month period.
B. Short term Indicators-- The 10-8 Day Moving Average Hilo Channel, 20 Day Moving Average Versus Price, 20-50 Day MACD Oscillator, and 20 Day Bollinger Bands suggest a buy. The 20 Day Average Volume is 66859422.
C. Medium Term Indicators-- The 50 Day Moving Average versus Price, 20-100 Day MACD Oscillator, and 50 Day Parabolic Time/Price suggest a buy. The 50-Day Average Volume 70653359.
D. Long Term Indicators-- The 100 Day Moving Average versus Price, and 50-100 Day MACD Oscillator suggest a buy. 100-Day Average Volume - 68089414. From a fundamental point of view, several analysts have expressed views, both positive and negative:
According to Patrick Wang, Wedbush Morgan, he remains positive on the stock give with a target to 18/share. He states "solid" Q1 results and "reasonable guidance" that reflect "excellent controls on manufacturing, gross margin, inventory and operating expenses."
Thomas Weisel Partners Ups target to $19 and repeats his Overweight rating. Cassidy writes that he remains "confident" that Intel's competitive position, healthy balance sheet and cash flow generation will allow it to weather the downturn. Similarly, Avian Securities maintain a target of 19/share. "While the guidance may seem a bit disappointing, especially after the recent rebound in the stock, we believe INTC is clearly benefiting from the end of deskstocking trends and showing some initial signs of improvement."
Canaccord Adams and have share similar views in that Intel is low-balling on revenue guidance, and that it should be able to grow 2%-5% sequentially.
Glen Yeung from Citigroup ups his target to $20. His thesis is that outsize growth and margin expansion are coming, and that the company has important product cycles ahead, including new areas like embedded processors and handsets.
Again, speculators might argue that the recent surge is most likely attributed to an earning run-up. I disagree. The breach of the 14.25 on 1.7 times the average daily volume cannot simply be an earning run-up unwarranted of worthy cause- The brewing of innovative products coupled with an undervalued balance sheet.
Disclosure: Author holds a long position on INTC
Noteworthy, Intel's Digital Health Group , which has invested heavily in information technology tools, is helping to cut healthcare costs and make the lives of doctors and patients easier. According to Louis Burns, head of the group, the trial at El Camino hospital in Mountain View,CA, is testing the safety and efficacy of INTC's chips to test computers with tablet displays among the nursing staff. The hope is to save doctors and nurses several hours per day in administrative work regarding the admission and discharge of patients.
Also at the Intel Developer Forum in San Francisco last month, Intel showed plans for technologies such as ``kitchen window'' computers, handheld computers that can be used in hospitals, and a laser-based communications technology that could improve the speed of computers by as much as 100-fold.
That said, however, here is the good news: for investors and traders, you'd be delighted to know that the slew of new chips and products have not yet been factored in the price of the stock. I adamantly believe that the rise in the share price from 12.00 to 16.00 is not the typical earnings run-up". For CEO Otellini to state that the bottom in the chip market has been accomplished, it's a bullish sign! It has been a tradition at INTC to issue a very conservative guidance.
From a technical perspective, INTC's behavior suggests a very bullish upside when mapped on the 3-month chart. The stock has traded in a perfect consolidation form from 12.75 to 15.15. The consolidation and basing patterns noted on the chart is highly suggestive of an ascending triangle formation. Thus, the resistance of 14.25 was breached and the stock remains well above that level, let alone all exponential moving averages.
Below are technical indicators based on a 3, 9, or 12 - month period.
B. Short term Indicators-- The 10-8 Day Moving Average Hilo Channel, 20 Day Moving Average Versus Price, 20-50 Day MACD Oscillator, and 20 Day Bollinger Bands suggest a buy. The 20 Day Average Volume is 66859422.
C. Medium Term Indicators-- The 50 Day Moving Average versus Price, 20-100 Day MACD Oscillator, and 50 Day Parabolic Time/Price suggest a buy. The 50-Day Average Volume 70653359.
D. Long Term Indicators-- The 100 Day Moving Average versus Price, and 50-100 Day MACD Oscillator suggest a buy. 100-Day Average Volume - 68089414. From a fundamental point of view, several analysts have expressed views, both positive and negative:
According to Patrick Wang, Wedbush Morgan, he remains positive on the stock give with a target to 18/share. He states "solid" Q1 results and "reasonable guidance" that reflect "excellent controls on manufacturing, gross margin, inventory and operating expenses."
Thomas Weisel Partners Ups target to $19 and repeats his Overweight rating. Cassidy writes that he remains "confident" that Intel's competitive position, healthy balance sheet and cash flow generation will allow it to weather the downturn. Similarly, Avian Securities maintain a target of 19/share. "While the guidance may seem a bit disappointing, especially after the recent rebound in the stock, we believe INTC is clearly benefiting from the end of deskstocking trends and showing some initial signs of improvement."
Canaccord Adams and have share similar views in that Intel is low-balling on revenue guidance, and that it should be able to grow 2%-5% sequentially.
Glen Yeung from Citigroup ups his target to $20. His thesis is that outsize growth and margin expansion are coming, and that the company has important product cycles ahead, including new areas like embedded processors and handsets.
Again, speculators might argue that the recent surge is most likely attributed to an earning run-up. I disagree. The breach of the 14.25 on 1.7 times the average daily volume cannot simply be an earning run-up unwarranted of worthy cause- The brewing of innovative products coupled with an undervalued balance sheet.
Disclosure: Author holds a long position on INTC
About the Author:
Dr. Jack Haddad, MD, MBA has been professionally trading the stock market since 1997 and had an annualized return of 39.4%. Dr. Haddad has recently launched MD Capital Management, an Investment Fund with Charles Schwab. The fund utilizes option hedging techniques to generate returns while minimizing risks. For more info, visit Jack's online group: MD Capital Management.
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