INTC is the maker of semiconductor chips, supplies the computing and communications industries with chips, boards, systems and software that are integral in computers,servers, and networking and communications products. For the39 weeks ended 9/30/00, revenues rose 18% to $25.02B. Net income rose 60% to $8.34B. Results reflect higher unit salesvolumes of microprocessors and increased realized gains on the Company%s Micron Technology holdings.

January 18, 2001

Intel sparked the technology stock rally this week by reporting better than expected earnings on Tuesday after the close. Intel reported profits of $2.63 billion, or $0.38 a share, which was a penny ahead of consensus estimates. However, Intel did warn that the first quarter will likely be at least 15% lower than the fourth quarter. Intel was cautiously optimistic that a global economic recovery could spark renewed buying of computers later this year. It is important to note that Intel rallied despite a somewhat negative outlook for the immediate future. When downtrending stocks rally on bad news that usually indicates that an important bottom has been created and the path of least resistance is back up. The rally could continue tomorrow due to the after hours rallies in Microsoft (MSFT) and Sun Microsystems (SUNW) following their earnings reports. INTC has found some major support at $30.00 and the stock has tested this price five times in the past couple of weeks. We are bottom fishing on this play because Intel looks very good on a risk/reward basis. The MACD is positive and a move above $33.06 could trigger a test of the 50-DMA at $36.19. A close above the 50-DMA could result in a more substantial comeback rally.

Picked on January 18th @ $32.19
Change since picked +0.00
Stop Loss @ $29.75