Intel Inside SOX Rally

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was in a positive mode even before the Fed’s
inter-meeting rate cut thanks to the fact that the chip giant topped earnings
estimates by a penny after the bell on Tuesday. The fact Greenspan and Co. have
become more proactive toward the economy should bode well for the semis since
the chip makers are usually the first group to rebound in the recovery process
for technology stocks.

Intel gained an impressive 20% Wednesday, rising 5.21 to 31.25,
and it did so with a surge in volume. More than 150 million shares changed hands
Wednesday which is more than double Intel’s average volume. What also was
constructive was the fact that Intel recaptured its 50-day moving average.
Intel’s next challenge is to hold above that average and to keep rising on solid

This move above the 50-day is similar to the late January move,
so it will remain suspect until Intel can prove that this is not just another
bear trap. What makes this upswing interesting is the fact that we have proof
that a very activist Fed seems genuinely concerned about the economy rather than
the more aloof attitude we saw after its Jan 3 rate cut.

Until Thursday,


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