Intel: Still Make Or Break
On the heels of the Nasdaq’s 14% jump last week, most eyes were
focused on the semis Monday as traders wondered if the group might be able to
keep running on some of the high-octane fumes that were left over from last
week’s powerful rally back from precarious lows. What weighed on the SOX Monday
was a fresh downgrade on Intel amid word the company would be slashing Pentium
prices.
While the action in Intel
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disappointing to tech bulls, they at least could breath a sigh of relief that
overall volume lightened up and that the pullback might just be the group
consolidating some of last week’s dizzying gains. Intel gave back 1.87, or 6.6%,
to 26.25 on volume of 59 million shares (72 million is the average) and will get
another shot Tuesday at breaking its vicious downtrend.
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As the chart above shows, Intel needs to recapture and hold that
50-day moving average that has been giving the chip giant so much trouble since
late November. While the SOX will undoubtedly need Intel’s help, there are SOX
components that are remaining relatively strong. Applied Materials
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gave back 4.3% Monday, and Novellus
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remain above recent lows and are worth keeping an eye on.
Until Tuesday,