Patient Intel Bulls Get Their Reward
EWM Interactive | Sep 20, 2016 04:43AM ET
Intel (NASDAQ:INTC) has been doing great recently. The stock fell to $27.67 in mid-February, but has been rallying ever since and even managed to exceed $38 a share last week.
That is the investor’s dream – a recovery of over 30% in just seven months. In order to inform our readers about that great opportunity, we wrote about Intel stock on February 2nd. Here is how its chart looked like back then.
By applying the Elliott Wave Principle‘s rules to the 4-hour chart of Intel stock, we identified a five-wave impulse, followed by what we thought was a complete expanding flat correction. According to the theory, the uptrend was supposed to resume, as long as the invalidation level at $24.86 was safe. Eventually, the bulls were expected to exceed the $36 mark.
Today is September 20th and we can already thank Elliott Wave analysis for helping us in this situation.
Truth is we could have done better. It turned out wave “c” of the flat correction was not over. Intel stock plunged to $27.67, before the uptrend resumed. The good thing is that even when we enter a trade prematurely, we could just stay calm and wait, because as long as our invalidation level holds, chances are still on our side. As we can see seven months later, $24.86 was never threatened. On the other hand, $36 was taken out easily and on September 16th, the stock climbed to $38.02. Now it looks like new highs could be seen, but first we should get ready for a pullback in Intel stock.
This article serves as an example of the fact, that even when you are right, you cannot know it immediately. While the forecast is still valid, all traders have to do is be patient. After all, the very purpose of analysis is to eliminate the emotional part of trading.
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