I Look For This Stock to Rally to a New All-Time High

The indices finished mixed yesterday with the Dow being the only one of the main four that lost ground. The Nasdaq led the way with a gain of 0.85% followed by the Russell with a gain of 0.44%. The S&P gained 0.25% and the Dow’s loss was 0.10%.

Seven of the ten main sectors moved higher on Thursday and they were led by two sectors with gains over one percent. The utilities sector gained 1.22% and the consumer discretionary sector gained 1.04%.

[hana-code-insert name=’adsense-article’ /]Of the three sectors in the red, it was the financial sector that finished with the worst loss at 0.93%.

My scans produced 37 bearish signals and nine bullish signals last night and that is the sixth straight night with a pretty sizable discrepancy between the two lists.

The barometer came in with a reading of -40.2 after those figures were punched in to the calculation.

Even though the scans have remained bearish in their tone, the trade idea I have for you today is a bullish one and it is on Intel (Nasdaq: INTC).

The company has great fundamentals with an EPS rating of 93 and an A on the SMR rating from IBD.

The chart shows how Intel has formed a trend channel since the low in February and that has helped guide the stock higher in the last few months. The stock has held up better than a lot of other semiconductor stocks, but it is the most oversold it has been since February. I look for the stock to rally to a new all-time high.

Buy to open the Aug18 55-strike calls on INTC at $2.80 or better. These options expire on August 17. The stock will have to move to a new high in order for these options to double, but I think it can do that. The target price for a double is $60.60 and that is only 9.1% above yesterday’s closing price. I suggest a target gain of 100% and a stop loss should the stock move below $54.50.

— Rick Pendergraft

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Rick Pendergraft, Trades Of The Day

Rick Pendergraft has been studying, trading, analyzing and writing about the investment markets for over 30 years. He has worked for some of the largest financial publishers in the world and he has been quoted in the Wall Street Journal, USA Today, the New York Times and the Washington Post. In addition, he has been interviewed on Bloomberg, CNBC and Fox Business News. Rick's analysis process includes fundamental, sentiment and technical analysis.