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CHART ANALYSIS


Are You Betting With The Chips?

04/03/03 01:28:30 PM
by Andrew Hetherington

Looking at the daily, weekly and monthly charts for Intel Corporation [INTC] may provide some clues for future moves within the computer chip sector.

Security:   INTC
Position:   N/A

On the daily chart for Intel (Figure 1) we have a 6-month symmetrical triangle. This triangle has the required volume diminishing from left to right. The third fan line is the bottom line on the triangle. The pickup in volume on the downside today (March 31, 2003) gives the early warning of the ID (impending doom) to come. The data provider has the incorrect data illustrated. The actual volume today is 67 million shares for the entire day and not 161 million shares. The third fan line and the bottom of the triangle will breakout on the downside in the $15.80 area.


Figure 1: Daily chart for INTC.

The long-term trends were broken in the $41.00 area in October 2000 and at $20.00 in June of 2002 (Figure 2). The weekly chart (Figure 3) illustrates the overhead resistance for the intermediate trend in the $20.00 area. Shorting off of this trend line and the top of the triangle in the $19.00 area would have proven to be a shrewd trade.

Figure 2: Monthly chart for INTC.
Graphic provided by: SuperCharts.
 

Figure 3: Weekly chart for INTC.

The downside move may not be fast but it will go towards the lower support levels of $14.00 and $10.00 eventually.



Andrew Hetherington

Classic Dow Theorist who trades as a pure technician, using pattern recognition.

Toronto, Canada

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