Don’t be fooled by Intel stock price

If you didn’t buy Intel and technology stocks at the close Tuesday, you may have missed your chance to get in on the fun, if history is any guide.

Bespoke Investment Group examined the trading around Intel’s earnings reports the last nine years. They found three things: 1. When Intel gaps higher post earnings, more than 75 percent of the time it finishes lower than that opening price at the close. 2. One week later from the report, 80 percent of the time the stock is little changed or lower from that opening price. 3. Like Intel, when the market opens higher on the back of the results from the world’s largest chipmaker, it too tends to decline from open to close.

There are a few theories for this action, according to investors and analysts. First off, Intel is literally the most followed U.S. stock on Wall Street, with 44 analysts giving quarterly estimates. With that many eyes on the firm, it is tough to keep surprising following such a blockbuster report. In other words, the biggest gains happen before the report as analysts and investors start to catch on that a good thing is coming. Intel was already 9 percent off its July low heading into last night’s report.

The more controversial view is that maybe Intel doesn’t always live up to the great expectations in the earnings report. Intel said gross margin was 67 percent for the quarter, higher than analysts and the company expected. But it also said that this margin level would be maintained in the third quarter, through its diverse product mix and not necessarily through much higher chip prices.

Maintaining that profitability “is the first thing that may come into question from investors and analysts taking a second look at the results,” said Brian Kelly, founder of Kanundrum Capital. "The quarter was great, but how long will this last?"

Intel certaintly wasn’t bashful about its performance, titling the press release last night simply, ‘Intel Reports Best Quarter Ever’. If it’s the best quarter ever, then traders may be inclined to take profits while they can in this still very uncertain world.

As for the market’s tendency to fade, maybe Intel is not the bellwether for the economy, the technology sector and the consumer that it is made out to be. Like clockwork, most chipmakers and PC makers were bid higher in the after hours following the Intel report. Many are giving up those gains today. Google is next on the tech earnings calendar with its report tomorrow.

"Intel is at the bottom of the tech food chain in terms of knowing what the real end demand is and is the last to know about market trends,” said Peter Bookvar, chief equity strategist at Miller Tabak & Co. "I’d rather hear what Hewlett-Packard, Dell and Best Buy have to say about PC sales, than Intel."

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John Melloy is the Executive Producer of Fast Money. Before joining CNBC, he was an editor for Bloomberg News, overseeing the U.S. Stock Market coverage team