Is Intel Corporation's Pullback The Start Of A Major Sell-Off?

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Shares of Intel Corporation INTC have been on fire to the upside for quite a while. Over the last handful of sessions, however, the stock has pulled back gently and is approaching short-term support at $33.84.

Should this dip be bought aggressively or is this the start of something bigger on the downside?

What the bulls see in Intel:

  • A company is that it is plugged into the macro trend of mobile computing/commerce.
  • A company with cheap valuation metrics: a price-to-sales of 3.20 and a price-to-book of 2.91.
  • A company that sports a flawless balance sheet (current ratio of 2.37 and debt-to-equity of only 27 percent) and enormous cash flow (over $7.54 billion in annual levered free cash flow)
  • A company whose stock is in the midst of a huge long-term upside run with a little room left before targets/projections are tested.

What the bears see in Intel:

  • The bears in the Intel arena have only an overbought condition on the price chart and the PEG ratio of two on which they can hang their hats.

Technical Update

Technical analysts note that Intel shares still have room to run up to the 161.8 percent Fibonacci projection line at $36.93 (from $34.71 early Monday). However, they do note that prior to the final push up towards the upside target, Intel could pull back a bit down to as low as $33.84 without any technical damage being done. With the strong uptrends in place, dips like this are to be considered buying opportunities according to the technical crowd.

Intel appears to be a great “buy the dip” candidate on a continued pullback to $33.84, should it occur. Fundamental tailwinds and strong technicals make for happy bulls in this stock.

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