Semi stocks look semi strong. Here’s your trade on Intel (INTC). (November 30, 2018)
NTC
Semiconductors are starting to perk up a bit so I thought I would cover this on Intel ( NASDAQ: INTC ). There are a couple different ways to trade this; you can really see what’s happening here. Let’s take a walk down memory lane. You can’t make money off of this but it does help you understand patterns.
The stock had been forming this kind of a reverse megaphone pattern, just kind of a reverse wedge. When you see this type of thing a lot of times you see water pouring out the end of it like a garden hose. And this comes down on a downtrend. That ended right here and now this stock is in this consolidation, this level right here in between the 200-day moving average and the 50-day moving average, so this is where we are getting supply.
There is nothing to do right now except watch the stock. If the stock breaks out above $50.00, that’s only 69 cents higher from where it is right now, if it breaks out above $50.00 that’s the time to be buying the stock. It has cleared the 200-day moving average; semiconductors are not really doing that well but they have found a floor. Just finding a floor doesn’t mean you are going up to the attic, it just means that you’re not digging deeper. They have kind of found a floor but Intel ( NASDAQ: INTC ) looks like it is starting to lead these higher.
The one buy would be above 50.00. Another one, a totally different type of trade, would be if the stock falls back down to the 50-day moving average, about $47.00 or so, something like that, that would be time to take an early entry. You would be making what is called a “pilot buy”, a real small buy right here in anticipation that, Hey, I am buying at the bottom of the box, that means that I will get rewarded if the stock moves back up and then breaks out and I can buy some more. In the first scenario, this is your first buy, when the stock moves out there. In the second scenario, this is your second buy because you bought down here.
That is how I would trade Intel ( NASDAQ: INTC ). Always trade in fractions. Never just pile in. Never just dump everything unless you just know you’re wrong or you know it’s time to go. But always trade in fractions and that way you think about it, you are a little bit more like a really good golfer, unless you go out and play 18 holes and hit an 18, you’ve made some mistakes. So the idea is to try to get it as close to the hole as you can and then finally tap it in. It is the same thing here in trading, you are trading, you are gradually increasing your risk exposure when this stock is working for you. And when it is not working for you, you are NOT increasing your risk exposure; you are just trying to get back in fairway.
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