Friday, February 4, 2011

Don't Jump into Intersil Cp Yet!

Intersil a good fundamental stock has just tumbled for more than 14.2% yesterday. Although it has recently announce 3 cents above the consensus estimate, it was badly punished due to the recent research report by J.P Morgan that reduces the target price to $13 from $14. Looking at the huge drop, I see opportunity in this fundamental stock, however, I believe that the time is not right here to jump into this chip company as I believe that the recent selling is not done yet.

Therefore, I decided to do a detail analyst on the chart and to find out when is the right time to invest this stock for a 10% gain at least.

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Intersil is currently trading between the range of $10 to $16 level. It has recently flirted with the $16 resistance level but has failed badly. I believe in the near future, this stocks will continue to be dumped badly until it has find the base at the $10 level or until the volume has dropped tremendously. Based on the long term chart, the 1st support for this stock is at the $10 level. However, it it manage to break the first support, the 2nd and important support will be at the $8 level.
Click on the above image to enlarge

Based on the short term chart, the recent upward range line has been breached with a bang! It gives no opportunity or any warning sign for investor to sell. It drops with a big loud bang and I believe many investors are still holding on to this stock. Both the MACD and Stochastic indicate a big sell on this stock. Based on the short term chat, the current level of $12.80 act as it first support. If it can break this level then the important supportw will be at the $10 level.

Click on the above image to enlarge

Based on the fundamental analysis of this stock, although it is volatile on its earning, if is no doubt a good fundamental stock. Moreover, for the past 3 years starting from 2008 - 2010, the dividend for this stock is a whopping $0.48 cents per year.

Overall, I believe that the recents big sell off for this stock is unjustifiable especially due to the research report by J.P Morgan. However, it does not mean that you can jump the gun and go directly to buy this stock yet. I think this stock is has a little big of room for the downside as more and more fund managers is dumping this stock.

I would definetely buy this stock at the $10 level. Patience is virtue, wait for the right time and you will be rewarded accordingly.

Disclaimer : This is not an investment advisory, and should not be used to make investment decisions. Information in The Market Oracle Blog is often opinionated and should be considered for information purposes only. No stock exchange anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. The charts provided here are not meant for investment purposes and only serve as technical examples. Don't consider buying or selling any stock without conducting your own due diligence. 
PT Lowered On Intersil By JP Morgan But 4Q EPS Reported Above Consensus
By Joe Young
Benzinga Staff Writer
February 03, 2011 9:04 AM

JP Morgan has published a research report on Intersil Corporation (NASDAQ: ISIL) after the company report 4Q EPS yesterday after close that came in slightly above consensus estimates.

In the report, JP Morgan writes "Yesterday after the close, Intersil reported 4Q10 EPS of $0.21, $0.03 above Consensus of $0.18, and $0.04 above the JPM estimate of $0.17 due to higher gross margins and a lower tax rate. Revenue of $194.0 million (down 11% QoQ) was below our estimate of $205.0 million (down 6% QoQ) and Consensus of $206.5 million (down 6% QoQ) due to lower than expected sales from the industrial, consumer, and comm end markets (77% of 4Q10 sales)."

JP Morgan maintains its Neutral rating and has lowered the price target from $14 to $13.

Intersil Corporation closed yesterday at $14.98.

(c) 2011 All rights reserved. This material may not be published in its entirety or redistributed without the approval of Benzinga. 

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