Intel Rebounded This Week. What Do Its Charts Show?
Intel 
INTC has gone through some rough times in recent years, but rose some 10% over a little more than a week after Wall Street seemed to like some recent news from the semiconductor giant.
What do fundamental and technical analysis say might happen next?
Let’s take a look:
Intel’s Big News
INTC reported three major developments on Monday.
First, the company disclosed that it will receive up to $3 billion in direct funding from the 2022 CHIPS and Science Act. (“CHIPS” stands for "Creating Helpful Incentives to Produce Semiconductors.”)
Intel will use the money for the U.S. Defense Department's Secure Enclave program. These funds are separate from the $8.5 billion that Intel had already received in grants and loans under that act back in March.
Separately, Intel and Amazon
AMZN announced after the bell what they called a "significant expansion" of their existing relationship -- a multi-year, multi-billion-dollar framework in which Intel will manufacture chips for AMZN.
Lastly, Intel unveiled a plan after the bell to set up its Foundry business as an independent subsidiary, separating reporting responsibilities and allowing the unit to potentially raise its own capital from outside sources. Some on Wall Street see this as a potential first step towards spinning off that business entirely.
Fundamental Analysis
Intel has struggled on a fundamental basis for some time, last month reporting a GAAP loss and negative year-over-year revenue growth for its fiscal second quarter.
As a matter of fact, the company has posted negative year-over-year revenue growth in 14 of its past 16 quarters. That's four years of Intel being beaten by industry peers, with many competitors seeing their stock prices run wild thanks to the advent of cloud data-center primacy and the emergence of generative artificial intelligence.
Technical Analysis
From a technical point of view, INTC appears to have peaked during the current cycle last Dec. 27 at $51.28 intraday. It seems to have then bottomed out on Aug. 8 at an $18.84 intraday low. That's a 63.3% drawdown peak to trough.
However, the stock has since partly recovered, seeing sharp gains Monday and Tuesday in and around this week’s well-received company news.
All in, shares closed at $21.14 Thursday, up 12.2% from Intel’s $18.84 Aug. 8 bottom.
Let’s look at the stock’s chart as of Wednesday afternoon (Sept. 18):
The first thing readers will notice is a drawdown that accelerated with a still-unfilled gap created in early August. Intel stock would need a $28.89 tick to fill that gap in.
A 23.6% Fibonacci retracement of that sell-off (the second-to-bottom horizontal black line in the chart above) would land Intel at $26.17, going a long way towards that fill.
Now, let's turn the above Fibonacci retracement model into an Andrews' Pitchfork instead:
Voila! Now we see a stock that has ricocheted off of the pitchfork’s lower trendline twice.
However, Intel has also broken out past the upper trendline once in a rally that failed, and is also showing signs of attempting another breakout as we speak.
Let's zoom in and check this out further:
What we see above is an apparent basing period of consolidation that has lasted more than six weeks. However, this entire base has existed in a very narrow range – something that can signal a violent move one way or the other.
Meanwhile, Intel’s Relative Strength Index (the gray line at the chart’s top) has improved to "neutral" from "weak" for the first time since July. Separately, the stock’s Daily Moving Average Convergence Divergence indicator (or MACD, denoted by gold and black lines and the blue bars at bottom) has postured itself more bullishly.
Within that MACD, the histogram of Intel’s 9-Day Exponential Moving Average (or EMA, denoted by the blue bars at the chart’s bottom) went positive almost a month ago and has held its ground. That’s historically a bullish signal, as well as a positive sign when viewed in conjunction with the MACD’s other components.
Similarly, the stock’s 12-Day EMA (the black line above) crossed above its 26-Day EMA (the gold line) a month ago and has held since then. That’s also traditionally bullish, although both lines are still in negative territory, which historically weakens the signal’s positivity.
The bottom line? There are no sure things here, but Intel appears to be in better shape technically than it has been for a while -- and very well might have put in a bottom for now.
Still, the real test could come if Intel approaches its 50-Day Simple Moving Average (SMA), denoted by the blue line at $24.44 in the chart above. A take and hold there would historically put the Fibonacci model in play -- and perhaps fill in Intel’s ugly, as-yet unfilled gap.
(Full disclosure: At the time of this writing, Moomoo Markets Commentator Stephen “Sarge” Guilfoyle was long Amazon.)
This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. Moomoo and its affiliates make no representation or warranty as to the article's adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct. Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.
TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third party platform.
INTC has gone through some rough times in recent years, but rose some 10% over a little more than a week after Wall Street seemed to like some recent news from the semiconductor giant.What do fundamental and technical analysis say might happen next?
Let’s take a look:
Intel’s Big News
INTC reported three major developments on Monday.
First, the company disclosed that it will receive up to $3 billion in direct funding from the 2022 CHIPS and Science Act. (“CHIPS” stands for "Creating Helpful Incentives to Produce Semiconductors.”)
Intel will use the money for the U.S. Defense Department's Secure Enclave program. These funds are separate from the $8.5 billion that Intel had already received in grants and loans under that act back in March.
Separately, Intel and Amazon
AMZN announced after the bell what they called a "significant expansion" of their existing relationship -- a multi-year, multi-billion-dollar framework in which Intel will manufacture chips for AMZN. Lastly, Intel unveiled a plan after the bell to set up its Foundry business as an independent subsidiary, separating reporting responsibilities and allowing the unit to potentially raise its own capital from outside sources. Some on Wall Street see this as a potential first step towards spinning off that business entirely.
Fundamental Analysis
Intel has struggled on a fundamental basis for some time, last month reporting a GAAP loss and negative year-over-year revenue growth for its fiscal second quarter.
As a matter of fact, the company has posted negative year-over-year revenue growth in 14 of its past 16 quarters. That's four years of Intel being beaten by industry peers, with many competitors seeing their stock prices run wild thanks to the advent of cloud data-center primacy and the emergence of generative artificial intelligence.
Technical Analysis
From a technical point of view, INTC appears to have peaked during the current cycle last Dec. 27 at $51.28 intraday. It seems to have then bottomed out on Aug. 8 at an $18.84 intraday low. That's a 63.3% drawdown peak to trough.
However, the stock has since partly recovered, seeing sharp gains Monday and Tuesday in and around this week’s well-received company news.
All in, shares closed at $21.14 Thursday, up 12.2% from Intel’s $18.84 Aug. 8 bottom.
Let’s look at the stock’s chart as of Wednesday afternoon (Sept. 18):
The first thing readers will notice is a drawdown that accelerated with a still-unfilled gap created in early August. Intel stock would need a $28.89 tick to fill that gap in.
A 23.6% Fibonacci retracement of that sell-off (the second-to-bottom horizontal black line in the chart above) would land Intel at $26.17, going a long way towards that fill.
Now, let's turn the above Fibonacci retracement model into an Andrews' Pitchfork instead:
Voila! Now we see a stock that has ricocheted off of the pitchfork’s lower trendline twice.
However, Intel has also broken out past the upper trendline once in a rally that failed, and is also showing signs of attempting another breakout as we speak.
Let's zoom in and check this out further:
What we see above is an apparent basing period of consolidation that has lasted more than six weeks. However, this entire base has existed in a very narrow range – something that can signal a violent move one way or the other.
Meanwhile, Intel’s Relative Strength Index (the gray line at the chart’s top) has improved to "neutral" from "weak" for the first time since July. Separately, the stock’s Daily Moving Average Convergence Divergence indicator (or MACD, denoted by gold and black lines and the blue bars at bottom) has postured itself more bullishly.
Within that MACD, the histogram of Intel’s 9-Day Exponential Moving Average (or EMA, denoted by the blue bars at the chart’s bottom) went positive almost a month ago and has held its ground. That’s historically a bullish signal, as well as a positive sign when viewed in conjunction with the MACD’s other components.
Similarly, the stock’s 12-Day EMA (the black line above) crossed above its 26-Day EMA (the gold line) a month ago and has held since then. That’s also traditionally bullish, although both lines are still in negative territory, which historically weakens the signal’s positivity.
The bottom line? There are no sure things here, but Intel appears to be in better shape technically than it has been for a while -- and very well might have put in a bottom for now.
Still, the real test could come if Intel approaches its 50-Day Simple Moving Average (SMA), denoted by the blue line at $24.44 in the chart above. A take and hold there would historically put the Fibonacci model in play -- and perhaps fill in Intel’s ugly, as-yet unfilled gap.
(Full disclosure: At the time of this writing, Moomoo Markets Commentator Stephen “Sarge” Guilfoyle was long Amazon.)
This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. Moomoo and its affiliates make no representation or warranty as to the article's adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct. Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.
TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third party platform.
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