Trading Analysis: HPQ, INTC

September 08, 2010, 14:09 pm ET, BY Thomas H. Kee Jr- Editor, Stock Traders Daily| Editor: Thomas H. Kee Jr. (Follow on LinkedIn)

Today’s news on Intel and Hewlett Packard have prompted a detailed technical review of these stocks.  Thomas H. Kee Jr., Chief Investment Strategist for Stock Traders Daily, has issued these comments in association to the trading reports provided to subscribers.

Intel (NASDAQ: INTC):  Consider this a defining moment for Intel.  At current levels, there are two ways of looking at INTC, each of which revolves around the same inflection parameter.  INTC is rapidly approaching longer-term support.  I have defined this for clients as longer-term parameter #1 in our real time trading report for INTC.  The dynamic is straightforward.  Bearish comments on INTC after the recent pullback will prove late to the game if longer-term support is tested and if it holds.  In fact, I believe making bearish comments prior to a break of support is undisciplined either way (see last paragraph below), but it may not be incorrect.  If longer-term support, as defined in our report, breaks lower instead, INTC will have an open door to momentum driven declines.  Now, regardless of the current news, everything rests on this longer-term support level.  In our detailed report, it has been provided to all subscribers as longer-term parameter #1.

Hewlett Packard (NYSE: HPQ): Not unlike Intel, HPQ is facing a similar inflection level.  Longer-term support is also being tested.  If HPQ breaks below this support level, shares will have an open door to additional and aggressive decline.  From here, it all rests on the stock’s ability or inability to hold longer-term parameter #1, as offered in our real time trading report to subscribers.  If it holds, a meaningful retracement will occur; an upside target has been offered.  However, if longer-term support breaks lower, aggressive declines should follow.  Longer-term parameter #1 will act as the determinate and interested parties should review our members report for HPQ today for details.

Technical analysis: by rule, when support levels are tested, buy signals surface.  Only when support levels break do short signals surface.  Therefore, given the tests of support in HPQ and INTC today, buy signals will occur if support levels are tested.  That will give us both an excellent entry level, and the ability to control risk if support levels break.  More importantly, if support breaks, we will also have a clear conversion signal, and be able to switch from long to short with the same measureable risk controls in place.  Longer-term support, as offered in each of these reports, can therefore be used to execute long and short plans for these stocks.  The market will determine which is more prudent for us, and that takes the guesswork out of the equation.  Members can access both of these reports.

Support and Resistance Plot Chart for

Real Time Updates for Repeat Institutional Readers:

Factset: Request User/Pass

Bloomberg, Reuters, Refinitiv, Zacks, or IB users: Access Here.