Possible short play in IntelThe new Intel CEO Pat Gelsinger is spending a wapping $20 billion into two chip manufacturing facilities and he is also restructuring the company. Analysts seem positive about this and has an average price target of $64.13 according to tipranks.com.
So the long term prospects of the company could very well be positive, but what about the short run? The stock is currently trading at a P/E ratio of 12.42 (forward P/E 12.07) which isn’t very high. But the PEG is 2.29 and that is very high as a value of over 1 is considered overvalued.
Technically things are not looking too great. INTC has fallen through support at the 50% Fibonacci level. From the end of May to mid-June it traded in a consolidation after finding support at the 62% level. It made a failed attempt to break that range on the upside and then fell right through again.
Volume is usually not very volatile but on the fall through day June 18 it traded more than twice the average volume.
On the monthly chart we can see the double top that has formed in 2020 and 2021. Right now, trading below what used to support at about 55.30 from the top in 2018. If we get a close under this level on monthly basis in June, I think a test to the rising trendline is the most likely scenario.
A test of the falling trendline from the top April 13 is likely before the next leg down. If we get such a test and if does fail this could be an opportunity for a short play with a target at the rising trendline on the monthly chart, currently at about $45. A stop would be just above the falling trendline.
