Thursday, April 27, 2006

Intel Stock Rally

So how did we know Intel (INTC) stock would rally after its disappointing earnings last week? (See 2 blog entries beneath this to see our original forecast). Since the poor earnings report 7 days ago (5 trading days), the stock has rallied more than 5%, to $20/share. This rebound effect is in line with our observations, over thousands of similar cases. The fundamental reasons for this effect are entirely psychological. This pattern repeats with startling regularity. If you're interested in the nitty-gritty details, check out this academic paper by Dr. Peterson entitled "Buy on the Rumor and Sell on the News."

Happy trading,

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