Key Takeaways
- Intel shares fell slightly on Thursday, following a steep decline the previous session. This marked the end of a five-day streak in which the stock had gained around 30%.
- Since the stock's steep drop in early August last year, the price has oscillated within an orderly trading range, potentially carving out a rectangle bottom.
- Investors should watch key overhead areas on Intel's chart around $26, $30 and $36, while also monitoring an important support level near $19.
Intel (INTC), a chipmaker facing a lot of pressure, saw its stock prices fall slightly Thursday. This follows a steep drop in the previous session which ended a five-day streak of gains.
The stock soared 30% over the course of the week after Intel named Lip-Bu as its new CEO. This was also a time when there were reports that Intel could sell off parts of its company. The stock dropped 7% Wednesday as new reports quashed some of the most recent deal speculation.
Despite a recent rally, Intel’s shares are down 43% in the past year due to the inability of the company to gain traction in the booming AI chips market and months worth of restructuring and deal-rumors. The stock fell by 0.7% on Thursday to $24.
Below, we look at Intel’s weekly chart. We use technical analysis to identify important price levels.
Potential Rectangle Bottom
Since Intel’s steep decline in early august last year, its price has oscillated in an orderly trading range. This could have created a rectangle-shaped bottom, similar to the rangebound phase that preceded the trending move of the stock in February and December 2023.
The shares have recently tested the respected moving average of 50 weeks over the past 5 weeks, but have faced selling pressure each time.
In a victory for the bulls the relative strength (RSI) index has reclaimed 50, indicating improved price momentum. Trading volume has increased in recent weeks as well, which indicates a growing investor interest.
Let’s identify on Intel’s chart three key overhead areas that investors may be looking at and also a significant support level that will likely attract interest in potential retracements.
Key Overhead Areas To Watch
Around $26 is where you should be looking for the first overhead area. This level is a confluence where the 50-week moving avg. and a horizontal that connects the lower range and upper range of the two rectangular patterns on Intel’s graph are both resistance.
A breakout above this level would trigger a move towards the $30 area. Investors could look to lock in profits near the psychologically round number and the series of peaks & troughs on the chart that formed between November 20,22 and June last.
The shares could climb to around 36, where they may run into selling pressure at the 200-week moving-average. This is a place where the price action on the chart stretches back to June 2022.
This area also roughly matches a projected bars-pattern price target that extracts a stock’s trending movement from February to the end of December 2023, and repositions it based on last month’s minimum. It predicts what a move upward might look like if past price history is repeated.
Important Support Level Monitor
Investors should also keep an eye on the $19 mark during retracements of Intel shares. Investors can view this area as the trading floor near to the low of rectangle pattern.
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