Intel went through a massive breakdown last week. After opening the session with an earnings-inspired breakdown gap, the stock dropped nearly 6% in extremely heavy trade. This was quite a destructive reversal from the fairly bullish action the previous day, says TheStreet.
For Intel, the $34 level holds the key
Investors showed immense confidence ahead of earnings, as they bid for shares aggressively. This will result in a deeper pullback in the end. Intel’s stock has been trading in a narrow range near the $35 area since the October 19 collapse, but perhaps this is just a pause before a new low starts. Patient investors should stay on the sidelines in the near term until the dust clears, says TheStreet
The main level to concentrate on is the $34 area, as it is Intel’s January peak. The stock held this level in July after it took a dive following its July 21 earnings report. This key level was tested again two weeks later, and it was held. Intel’s stock started a powerful bull run from that point, the August 3 low, and ultimately, it carried shares almost 12% higher.
Last year was a banner year for hedge funds in general, as the industry attracted $31 billion worth of net inflows, according to data from HFM. That total included a challenging fourth quarter, in which investors pulled more than $23 billion from hedge funds. HFM reported $12 billion in inflows for the first quarter following Read More
Further downside will be limited if the stock can hold the $34 area once again. Considering the negative developments since the October peak, for instance, a monthly key downside reversal, a base would be pretty impressive here. Investors should focus on this area, says TheStreet.
Overhead pressure continues to build, so a clean break of the August low — a one-third retracement of the stock’s 2016 range — could allow for a “much deeper sell/off.”
Intel continues OpenStack cloud drive with Huawei partnership
In other Intel news, the chip maker and Huawei are set for a tie-up to boost adoption of private cloud infrastructure. The partnership will be based on Huawei’s FusionSphere – the OpenStack-based cloud operating system. This collaboration will see the two companies improve the capabilities of the platform via quick customer evaluation and community engagement, notes CBR. The move comes as part of Intel’s “Cloud for All” Initiative.
Huawei believes this alignment will serve companies that want to remain competitive by adopting hyper-converged, hyper-efficient cloud environments, said Joy Huang, VP of Huawei’s IT Product Line. Huang added that the Intel architecture-optimized FusionSphere solution will give the security, performance and reliability that enterprise IT needs.
Jonathan Donaldson, VP of Intel’s Software Defined Infrastructure and Data Center Group, said, “This Intel Cloud for All collaboration will accelerate Intel’s goal of deploying tens of thousands of new clouds.”