Don't Ignore This Chart!

Intel (INTC) Letting Its Chips Fall?

Tom Bowley

Tom Bowley

Chief Market Strategist, EarningsBeats.com

Actually, this chipmaker's chart looks very strong, especially longer-term.  After a strong advance in late 2014, a negative divergence emerged and was followed by a topping head & shoulders pattern.  The measurement of that pattern - from the top of the head to the neckline -was roughly 17.8%.  Once neckline support was lost, the measurement is determined by another 17.8% decline, or a drop to roughly 24.66.  Several weeks ago, INTC found its bottom at 24.87, not far from reaching that measurement/downside target.  Now INTC is rebounding and it's doing so with nice relative strength vs. its peers and at a time when semiconductors have held relative trendline support vs. the S&P 500.  On Wednesday, INTC closed back above 30.00, an important short-term resistance level but is currently trading back beneath that level today.  On this weekly chart, we need to see a weekly close above 30.00 to trigger a buy signal.  In the meantime, more short-term weakness down to test recent price support near 28.00 could suggest building a long position as well.  Have a look at this 5 year weekly chart:

Happy trading!

Tom

Tom Bowley
About the author: is the Chief Market Strategist of EarningsBeats.com, a company providing a research and educational platform for both investment professionals and individual investors. Tom writes a comprehensive Daily Market Report (DMR), providing guidance to EB.com members every day that the stock market is open. Tom has contributed technical expertise here at StockCharts.com since 2006 and has a fundamental background in public accounting as well, blending a unique skill set to approach the U.S. stock market. Learn More