Not too long ago, on August 10th, Intel stock was trading around $36.60 per share. The price was in recovery mode, following a decline from $38.45 to $33.25. By November 3rd, it reached $47.29 for a 29.2% return in less than three months. According to analysts covering the company, the reason for this phenomenal surge was Intel’s earnings and revenue beat in the third quarter. Of course, strong profits help stock prices, but truth is there were plenty of bullish signs on the charts of Intel stock much earlier. The one below was included in “Intel on the Verge of Something Big”, which we published two and a half months before the company’s Q3 earnings report was released on October 26th.
As visible, since the pullback from $38.45 looked like a w-x-y double zig-zag correction, and since the big picture outlook was also very positive, the Elliott Wave Principle made us think the entire recovery from $24.91 represented a series of first and second waves of a larger uptrend in progress. All this led us to the conclusion Intel stock is poised to move even higher in wave (iii) of 3. While most were eagerly waiting for the earnings report, Elliotticians recognized that the stage was already set for a surge. Then this happened.
In fact, by the time Intel reported its Q3 results, more than half of the rally was already behind us. This chart is a good illustration to Ralph Nelson Elliott‘s famous words that “the habit of the market is to anticipate, not to follow.”
Now, wave (iii) is supposed to be much longer than wave (i). So far that is not the case, so we believe there is plenty of room for further appreciation. However, once the rally from $33.25 forms a complete five-wave impulse in wave i), we should expect another short-term pullback in wave ii) before the uptrend could resume in wave iii) of (iii). In any case, keeping a long-term perspective is recommended. The bulls are still in charge of INTC stock.
