INTC – Intel Corporation - The world leader in silicon innovation has seen its shares pulling back after breaking through the main bearish resistance line at $15.90 and reversing the outlook from bearish to bullish. Since December 07 peak at $27.90 prices started declining sharply developing two Long Tail Down patterns that in few weeks reached $18.10. The key signal that changed the nature of the trend to bearish has been the breach of the main bullish support line at $25.00. From the Low Pole at $18.10 prices entered into a corrective up move that bounced off $25.20 a former support level during last stage of the uptrend. A lower high at $24.70 triggered a new wave of correction that found solid support only in November 08 at $12.10 where a new phase of accumulation lead off. After trading sideways for few weeks and testing again the strength of the $12.10 support the breakthrough of the $15.70 resistance gave way to the trend line assault. The breach of the main bearish support line failed twice before a double top breakout at $15.90 sealed the trend reversal. We are now expecting prices to pull back deeper towards the intermediate trend line at least, before resuming the uptrend. The positive long term Relative Strength implies Intel will likely outperform the market in the long run. Long positions should be increased at the double top breakout at $16.40 with short term target at $16.90 initially then at $18.30. In the medium term the price objective is set at $22.00. On the downside lighten at double bottom breakout at $14.90. Close all long positions at penetration of the main bullish support line now crossing at $14.40 with possible contraction down to $13.00.
EXC - Exelon Corporation - Provider of energy services with an electric and natural gas distribution, Exelon is the largest nuclear operator in the United States. The all time high reached with the July 08 double top at $92.00 signaled the peak of an extensive rise lasting since November 01. The trend reversal was sealed at the breach of the main bullish support line at $89.00 when the movement entered into a sharp decline that in 3 months literally halved shares value reaching $41.50. Prices started trading sideways since then swinging within the range $58.50/$50.50 until a swift down move to $38.50 break through the support line. The recent corrective up move bounced off the main bearish resistance line at $49.50 clearing the way for additional contraction. Long term Relative Strength vs the market is negative leaving no reason to stay long. Close all remaining longs at double bottom breakout at $40.00 with initial contraction to $37.50. On the upside long positions should be taken only at penetration of the main bearish resistance line now crossing at $49.00 with projected target set at $61.00.
SIAL – Sigma-Aldrich Corporation – Shares of the leading Life Science and High Technology company are now rising along the intermediate support line confirming the bullish outlook. Prices are also supported by a positive long term Relative Strength which makes it an outperformer. From the December 06 peak at $79.00 prices declined severely with a Long Tail Down pattern which, after breaking the main bullish support line at $69.50 and reversing the trend to bearish, signaled that all long positions should have been liquidated. The sharp down move found support at the double bottom at $37.50 which generated a corrective reaction contained by the $63.00 resistance, a former support level during the previous uptrend. The double top at $63.00 triggered a new wave of contraction that reached solid support at $34.50 before entering into a sideways movement lasting until February 09 when a sharp selloff reached $31.50 and developed into a Low Pole pattern which breaking through the main bearish resistance line at $38.50 switched to bullish mode. The same Low Pole pattern projected an upside target set at $58.50. Prices are now rising along the intermediate support line which containing the latest pull backs proved to be solid. Long positions should be taken with target set at $58.50. On the downside lighten at double bottom breakout at $40.00 and close all long positions at penetration of the main bullish support line now crossing at $36.00 with prospective contraction down to $20.50.
Fabio Verdelli (CMT) is equity technical analyst at MV Portfolio Advisors. He has analyzed commodities and financial markets using technical analysis since 1998 and implemented technical analysis to develop trade ideas and assess risk. He is an expert on Point & Figure charting method and is currently publishing analysis on “Trend-online” financial website and Yahoo Finance Italy.Verdelli is a member of the Market Technician Association (MTA) and a member of the nominating committee within the MTA
MV Portfolio Advisors offers capital investment and risk management consulting. The firm provides equity research reports based on technical analysis featuring investment opportunities arising in the marketplace to help portfolio managers making timely trades.