INTC bearish ascending wedge nearing end. Risk/Reward 1:5
The chart says it all. If I wanted to guess at fundamental catalysts that would cause this, is Intel's continued delay of 10nm. Also, Intel's only competitor, AMD's chart is just breaking resistance of over a year of consolidation. I'm guessing AMD will be taking market share in a big way.
This is a simple short setup, nothing too overly complicated to explain here. Typically, wedges breakout to 100% of their height in the opposite direction.
This is a simple short setup, nothing too overly complicated to explain here. Typically, wedges breakout to 100% of their height in the opposite direction.
Trade active:
INTC dropped below the wedge at the open today and fought its way back, only to fall again. The move back into the wedge was rejected and I have added to my short position, buying nearer expiration puts.
Now, this was just my best guess at the fundamental catalysts to explain the two charts, but Technical analysis can really be used to predict the future, and this is one of the more spooky calls I have made.
As far as the INTC short goes, it is now looking very good, INTC touched the resistance at the lower boundary of the wedge and is now making a bear flag, so I see the break to the downside happening very soon, possibly even Monday.
I had entered a speculative short with very cheap, very OTM puts with a 7/20 expiration. This was based on the bearish nature of the wedge and seeing the price rise near the top of the formation. This was a risky trade, so I don't recommend it with the conviction of a trading strategy I would post here. I will be buying nearer expiration puts on confirmation of the wedge breakdown. I just wanted to post an update to keep a close watch on INTC early next week.
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Disclaimer: As always, the responsibility for managing your position is your own. I am not a financial adviser nor is any content in this post intended to be financial advice. The information presented is my opinion, based on tools I have learned from others sharing their opinions and my experience in the markets. I share these ideas to generate discussion and have others critique my analysis because, as always, I am still learning. With that in mind, the outcome could be quite different than what I am predicting and this is for informational purposes only. It should not be considered financial or investment advice of any kind. Readers should consult with a financial or investment professional to determine what may be best for their individual needs.