Hold Intel (INTC) and General Motors (GM)
Markets pulled back yesterday and the Dow, S&P 500 and Nasdaq all closed lower. A couple of our holdings were hit particularly hard, so I wanted to send a quick update even though I’m not recommending any action. Read on if you own Intel (INTC) or General Motors (GM), both of which are rated Hold.
Hold Intel (INTC)
I put Intel on Hold in Wednesday’s update, after the stock’s pullback brought it south of its 50-day moving average. Then yesterday the company’s CEO, Brian Krzanich, resigned over a relation with a subordinate that violated Intel’s policies. The stock reacted negatively, but moderately, falling 2.4% but closing above where it was a few days ago.
I’ll keep INTC on Hold. The search for a new CEO could weigh on the stock, which is already under pressure due to production delays and increasing competition. If we had some profits we’d take them, but the stock is only a few points above where we bought it at the end of March. For now, we’ll just Hold.
Hold General Motors (GM)
GM also took a dive yesterday, closing just above its 200-day moving average (which is above its 50-day). GM doesn’t have a definable trend at this point, but if it is going to start a new uptrend, this pullback to the 200-day shouldn’t get in the way of that. A break through the moving average, on the other hand, could delay things a bit.
Either way, the appropriate rating is Hold. As I wrote in Wednesday’s update, “I’d like to see the stock start a sustained, renewed uptrend and break out past about 46 before putting it back on Buy.” Yesterday’s pullback confirmed that that’s the right way to treat this volatile, news-driven stock.
