Intel Corporation (NASDAQ: INTC) shares fell 0.7% on Thursday, closing around $24, as the stock continued to cool off after a steep downturn on Wednesday. This drop ended a five-day winning streak during which the embattled chipmaker surged approximately 30%. The recent rally followed the appointment of Lip-Bu Tan as Intel’s new CEO and speculation about potential business divestitures. However, reports that cast doubt on the rumored deals triggered profit-taking, sending shares lower.
Intel’s Volatile Year: Still Down 43% Despite Recent Rally
Even after its recent surge, Intel shares remain down 43% over the past year. The company continues to struggle with gaining traction in the booming AI chip market, while months of restructuring and uncertain deal prospects have kept investors cautious.
Technical Analysis: A Rectangle Bottom in Play?
Since its sharp decline in August 2024, Intel’s stock has traded within a relatively orderly range, potentially forming a rectangle bottom pattern. This technical formation could signal a potential trend reversal if the stock breaks above key resistance levels.
Key Price Levels to Watch
Resistance at $26:
The first overhead resistance sits around $26, where the 50-week moving average (MA) intersects with a horizontal resistance line. A breakout above this level could trigger a more sustained rally, signaling growing bullish momentum.
Targeting $30:
If Intel decisively clears $26, the next target is around $30. This area is significant due to psychological resistance and the presence of previous peaks and troughs from late 2022 to mid-2024. Investors may look to lock in profits around this zone, making it a potential selling area.
Key Resistance at $36:
A successful breakout above $30 could propel the stock toward $36, where it may encounter stronger selling pressure. This level coincides with the 200-week moving average, a long-term trend indicator that often acts as a major resistance point. The $36 region also aligns with historical price action dating back to June 2022 and matches the projected price target from the previous trending move.
Support Level to Watch: $19
On the downside, $19 serves as a crucial support zone. A breakdown below this level could indicate further weakness, potentially negating the bullish rectangle bottom setup and opening the door to deeper declines.
Improving Technical Indicators Offer Hope
Despite the recent pullback, bullish technical signals are emerging:
- Relative Strength Index (RSI) reclaimed the 50 threshold, signaling improving price momentum.
- Trading volume has increased in recent weeks, indicating growing investor interest, which may support further upside.
Conclusion: Intel at a Technical Crossroads
While Intel’s stock remains volatile, the recent rally and emerging technical patterns suggest the potential for a trend reversal. Investors should watch for a breakout above $26 as a potential signal of further upside. However, failure to hold the $19 support level could point to renewed downside pressure.
With new CEO Lip-Bu Tan at the helm and ongoing restructuring efforts, Intel’s future hinges on its ability to regain market share and capitalize on the AI boom—making it a stock to watch closely in the coming months.
