2020 is shaping up as a year to forget for Intel shareholders. The stock is down over 20% year-to-date. First, the coronavirus selloff caused a 35% plunge down to less than $44 a share. And just when it seemed INTC was recovering, the company announced it will delay its 7nm products until late 2022 or early 2023. The shares took another hard hit as a result.
What is interesting is that both declines seemed to have occurred exactly when they had to. From an Elliott Wave point of view, if it wasn’t for COVID-19 and the 7nm delay, something else was going to drag Intel down. That is because, as the chart below shows, the stock was due for a correction anyway.
The weekly chart of Intel stock reveals that the entire uptrend from $12.05 in February 2009 is a five-wave impulse pattern. It is labeled I-II-III-IV-V, where the five sub-waves of waves III and 3 of III are also visible.
According to the theory, a three-wave correction in the opposite direction follows every impulse. And indeed, the decline from $69.29 is already starting to look like a simple A-B-C zigzag retracement. Wave A corresponds to the COVID-19 crash, while wave C was triggered by the 7nm production delay.
Wave C is supposed to breach the bottom of wave A, meaning Intel can fall to $40 or lower. Once there, however, the 5-3 wave cycle from the 2009 bottom would be complete. The trend can then be expected to resume in the direction of the impulsive pattern. Instead of giving up on Intel, investors should think about taking advantage of its current weakness.
Similar Elliott Wave setups occur in the Forex, crypto and commodity markets, as well. Our Elliott Wave Video Course can teach you how to uncover them yourself!
