INTC - Buy the Dip (Pt. 2)INTC like other growth stocks has retreated post US election turmoil and news on a Covid-19 vaccine. I see this as part of a wider selling of "stay at home stocks" vs. more value based names.
Currently INTC is testing the March 2020 lows after gaping lower 2x on the past two earnings releases and is now trading well below its 200 and 50 EMA's. On a long term basis the low to mid $40 levels have proven to be a strong support in the past and has attracted buyers on each occasion. YTD the stock is down roughly 21%
From a fundamental and relative valuation perspective the stock is accredited with a BUY rating by most analysts with a 12-months price target consensus at $52.90. The stock trades at a significantly lower forward PE of 8.9 than its peers with an avg. of 27.1, but with a higher dividend yield (2.9% vs. 1.8%). In comparison INTC's fundamentals remain promising in my view, even with competitors such as AMD catching up.
Technicals
Recently bounced off long term support level near $43
Formation of a short-term wedge since mid-October
Positive MACD crossover point is forming
Short term resistance around $47 (post earnings gap) and $49 (July 2020 low)
I will looking be to enter the stock around current levels given the technicals above confirm a breakout of the wedge. Stop loss just below lower wedge line.
