The bulls sure have been pushing the limits of support this summer. Just when charts seemed like they were getting more constructive, we would have another leg down and blow out tons of stop losses. Note how this price action contrasts to the unfilled gaps that we saw during the sharp rally off of the March 2009 bottom. It can be argued that the current market action is healthier, in terms of all of the backing and filling.
Regardless of your opinion on the matter, $INTC illustrates the point about pushing the limits of support. The stock broke out of a multi-month falling wedge after its blowout earnings report. It then flattened out in a tight and seemingly bullish manner. Today, the giant chip maker is off over 2%, and the stock is simultaneously testing the convergence of the 20, 50 and 200 day moving averages. So, consider Intel on my list of key tells, given how the chart sets up, not to mention the size and significance of the firm’s operations. If we see the bulls rush in and provide a strong bid at this key support zone, then I will be able to buy with more confidence across the board.