Altera Corporation (NASDAQ:ALTR) is one of the hottest stocks right now as it has appreciated by 28.39% in a single session on the back of the rumor of Intel Corporation (NASDAQ:INTC) acquiring it. INTC rallied by 6.38% too, suggesting that the market will take the acquisition, if it really takes place, quite positively though it will be the largest acquisition in Intel’s history. One must consider that even before the 28%+ rally, the market capitalization of ALTR was standing at $10.4 billion roughly. In that way, this can be compared only with the $7.7 billion acquisition of McAfee by Intel as generally Intel sticks with smaller companies for grabbing.
Intel can realistically consider buying out Altera Corporation (NASDAQ:ALTR) as it designs chips for phone networks and cars and Intel has been trying to make a mark in the mobile chip business for a while now. The two companies are already associated with a 12-year deal that has made Altera the sole programmable chip manufacturer for Intel for assistance in building products.
Some analysts find Altera Corporation (NASDAQ:ALTR) a bit overvalued as the market implication of a 8.86% growth over the next 7-10 years looks significantly greater than the usual rate of the company in the recent years.
Technically, these two sessions will prove if this spectacular rally is just a flash in the frying pan or not. If follow up buying emerges from anywhere from the major support band of $38-$42, then we can see the 5 year high of $50 getting tested soon enough. A 4 year sideways consolidation, as seen from the chart, can provide a lot of strength to the bulls and this range, gives us targets of $46 and $54. Any aggressive investor may closely watch the reaction near the support band of $38-$42 and may buy the stock with a stop loss below $37.