Key Takeaways
- Intel shares rose Wednesday amid a rally in chip stocks after President Trump declared a 90 day pause on tariffs which had rattled the financial markets.
- Wednesday's bullish reversal saw the stock reclaim the September low, potentially setting the stage for follow-through buying.
- Investors should monitor key overhead areas on Intel's chart near $25 and $35, while also watching a crucial zone of support between $18.50 and $17.
Intel (INTC), shares surged Wednesday, amid a massive rally for chip stocks following President Trump’s announcement of a 90-day suspension on “reciprocal”, tariffs.
Stocks may also be attracting attention after reports that the chipmaker had tentatively agreed to create a joint venture, which would run the foundry business of the U.S. firm.
While tariff developments are likely to continue to drive sentiment in the near-term, confirmation of a possible deal with TSMC which ramps up domestic contract manufacturing could act as a catalyst for further upside.
Intel shares have outperformed the S&P 500 since the start of the year as of Wednesday’s close, though the stock has lost 44% over the past 12 months amid uncertainty surrounding the chipmaker’s restructuring plans and constant deal speculation. The stock closed at $21.53 after gaining 19% on Wednesday.
Below, we analyze Intel’s monthly chart using technical analysis and identify critical levels that investors might be watching.
Bullish Reversal
Intel shares have been trending sharply lower since forming a second top between January 2021 and April 2021. A countertrend rally in December 2023 to the 50 month moving average (MA), however, was met with immediate pressure from sellers.
Recent bearish selling led to a short sell-off under last year’s September’s low, before bulls reclaimed the key level in Wednesday’s bullish reverse, setting up a potential for follow-through buying. Investors should prepare for more volatility as the trading volume in the stock has increased since August of last year.
Let’s identify the key overhead areas that need to be monitored and also highlight a crucial support zone worth watching in light of the potential for additional tariff-driven volatility.
Monitor the Key Overhead Areas
Shares could initially climb to around $25 if you continue buying at current levels. This area of the chart could provide selling pressure near the trendline that links multiple peaks on the chart going back to mid 1997.
A longer-term bullish trend could lead to a price rise of $35 if you buy above this level. Investors that have purchased the stock at recent lows could look to unload shares near the 200 month MA and the multi-year horizontal lines that link a range of similar trading activity on the chart from January 1999 to September 2023.
Important Zone of Support to Watch
During future moves lower in the stock, investors should keep track of a crucial zone of support on Intel's chart between $18.50 and $17. This region will likely continue to attract significant attention from investors, given it's the location that marked the stock's recent low and sits near a range if similar price points stretching back to the late 90s.
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