Intel Still Holds All The Chips
Intel Corp.(NASDAQ:INTC) has come under some serious downgrades from several leading brokerage firms recently. On May 20, 2011 the stock was downgraded by Goldman Sachs Group(NYSE:GS) to sell from neutral. This morning Intel stock was downgraded again by FBR Capital to market perform.
The chart on Intel stock tells a different story. The stock has certainly pulled back from its May 18, 2011 high where it traded at $23.96 a share. Then again, every stock has pulled back in the month of May. The stock market is lower by nearly 7.5 percent since May 2, 2011. Intel stock is trading just slight below the daily chart 20, and 50 moving averages. The stock is still trading above the daily chart 200 moving average. Intel stock should have good daily chart support around the $21.00, and $20.00 levels. In other words, this stock has not held up this well in a long time.
The leading competitor to Intel Corp. is chip maker Advanced Micro Devices Inc(NYSE:AMD). This stock is certainly beaten down on the charts and severely oversold. While AMD stock is down sharply and coming into a double bottom support level the trend on the stock is down. AMD stock is trading sharply below all of its major moving averages. Therefore, any bounce that occurs in AMD will soon be met with heavy resistance. That is the nature of down trending stocks, they are just good for bounces until they can recapture the important moving averages.
When a trader is looking to buy a stock it is always better to chose the stronger stock in the sector as opposed to buying the weaker stock. In this case, Intel Stock is the stronger stock and continues to look decent on the charts.