More than a month ago, on December 23rd, 2015, we published “Intel Poised For a Noteworthy Pull-Back?” to warn you about “a decline of more than three dollars a share” we thought Intel stock is about to suffer. The reason for our highly bearish opinion was not in the company’s fundamentals. As always, we decided to trust the Elliott Wave Principle, which helped us spot a nice five-wave impulse on the chart below.
According to the theory, every impulse is followed by a correction in the opposite direction. That is why we assumed the five-wave sequence to the north would give the beginning of a significant decline soon. We did not have to wait long. Less than a week later, Intel topped at 35.57 and started the anticipated sell-off. Here is how the 4-hour chart of the stock looks like today.
On January 20th, 2016, prices fell to as low as 29.21. The plunge we have been expecting turned out to be much larger. Intel stock fell not just by 3, but by more than 6 dollars a share, which is a great demonstration of the Wave principle’s ability to prevent traders and investors from making the worst possible decisions in the worst possible moments.
Now, with a little relabeling, the chart of Intel stock shows an impulsive rally, followed by an expanding flat correction, which is almost touching the 61.8% Fibonacci level. If this is the correct count, the stock looks like a bargain right now, because the trend is likely to resume in the direction of the five-wave advance. As long as the invalidation level at 24.86 holds, Intel is supposed to be aiming at the 36-dollar mark or even higher.
