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

February 6, 2001

The early slip in technology stocks on Monday created enough selling pressure to trigger our protective stop on Intel. The drop was a little bit surprising because Intel did have some good news yesterday. Israel agreed to give Intel a $440 million plant subsidy. Intel also entered into a flash memory chip agreement with Cisco Systems (Nasdaq:CSCO). Financial details were not disclosed but the deal should result in several hundred million dollars of sales for Intel over the next three years. If Intel can break from this current consolidation phase, we may try this play again.

Picked on January 18th @ $32.19
Profit/Loss +1.81 (6%) (Stopped Monday @ $34.00)
Best Profit +6.40 (20%)

February 4, 2001

The markets, and particularly technology stocks, finished last week on a somber note. Intel coughed up its earlier gains and finished the week without making any progress. The problem stemmed from some mixed signals out of the jobs data. For now it appears that there is not any stimulus to drive the Fed to cut rates again anytime soon. Traders are left with only earnings to ponder and this does not bode well for tech. Short- term earnings prospects are not particularly encouraging, especially in the semiconductor arena. Nevertheless, this is just part of the ebb and flow of the markets. If there is follow through selling, Intel may be a good buy on Monday if it bounces off support provided by the 50-DMA at $35.00. A move above resistance at $38.75 on good midday volume of 40 million shares or more could trigger some momentum buying. Intel still possesses a positive trend, as indicated by the MACD and OBV appears to have put in an important bottom. A little consolidation followed by a resumption of the up trend seems to be what is in store for the shares of Intel.

Picked on January 18th @ $32.19
Change since picked +3.50
Stop Loss @ $34.00