Albany, New York (09/23/2014) – Intel Corporation (NASDAQ:INTC) (Closed: 34.71, Down: -0.32%) is in a corrective mode right now and the last candle it formed on Monday, signaling selling pressure at the higher levels support that. In a normal correction, the price should have bounced sharply to a new high from the previous low of $34.23 but the failure here points to a Complex correction, extending for a few more sessions even if any major reversal doesn’t take place. The volume is not suggesting any selloff taking place as the figure of 25 million is much lower than the average of 32 million.
The stock is stuck in the narrow 4% range of $34-$35.50 for the last 5 weeks and that is not a pointer to any severe weakness. It may yet turn out to be just a shallow correction before the next leg of the big rally resumes. In the weekly chart, we can clearly see a channel containing the entire rally from the 2014 low of $23.50 to the 2014 high of $35.56, registered this month, has been broken on the downside by the price last week but no serious crack has emerged yet. One may even see an Expanding Triangle developing with the current boundaries, standing at $34 and $36.
This kind of price action keeps the possibility of a false breakdown and a reentry to the channel alive, which would be called the 4th wave correction and the subsequent rise, the 5th wave rally. This immediate bullish scenario remains possible until $34 is broken on the downside.
The long term chart projects the area between $34.60 and $36.80 as a potential supply zone, but in the coming months, it may be tackled successfully in the light of the huge 10-year long Inverse head & Shoulder pattern, suggesting targets of $40 and much higher.
Investors may wait for a dip towards $30-31 for a long term entry in the stock for an excellent return in the coming months.