Mar7: INTC

I guess nobody else is holding INTC call options, but I do. Although it looks cheap, INTC is a component of DJIA and playing an important role in the market. I hope its direction can give us some hint to the big market.


The weekly chart shows the intermediate and long term pattern. This chart is pretty clear:

1. the uptrend since Aug 2006 has reversed in Jan 2008.

2. from the RSI and STO, the price in Jan is not likely a bottom (yet).

3. a triangle pattern is forming since this Jan, and the volume is decreasing which support this pattern.

4. about 18.x there is a support. However it was broken in Jan, so it will likely be broken easily again.

From TA's perspective, it will have a breakout very soon (within two weeks) and the target is 14-16 in the intermediate term (after 2 or 3 months). Usually after the breakout the lower edge of the triangle will be tested, that means we will see price under 19.5, and then a sucker's rally to touch ~20, and then go down to touch 18.x, then up and down.


The daily chart shows the near term picture, which is not entirely clear to me (remember I am a new frog!). What I am seeing is:

1. the intermediate term uptrend has been reversed in the early Jan, this is identical to the weekly chart.

2. it's forming a downward triangle, which is bullish IF the price is bottomed out.

3. volume is flat, so above pattern may not be valid;

4. neither RSI nor STO indicate a bottom so upside breakout is not expected.

5. IF there was a upside breakout, the target would be 24 (remember this is unlikely).

Therefore, the daily chart is neutral to bearish.

My INTC Apr calls are surely hopeless. I am waiting for a chance to put it.

I am not suggesting to put it, but it may indicate that DJIA has probably a big downside movement in the following weeks.