Don't Ignore This Chart!

Intel Testing Key Short-Term Support

Tom Bowley

Tom Bowley

Chief Market Strategist, EarningsBeats.com

On October 26th, Intel (INTC) posted quarterly earnings results and beat both revenue and EPS estimates.  It resulted in a very strong gap higher the next morning and then INTC continued rising, tacking on another 10% within a week.  But INTC became very overbought with an RSI above 90 and needed a pullback.  Since topping in early November, INTC has lost close to 10% and is now testing the top of gap support and its rising 50 day SMA:

The RSI has fallen back into the 40s (black arrow) and that's typically a level where we see prices turn higher again in an uptrend.  The huge rally in September and October began after an RSI 40 test in August so I like the odds of a similar reversal at or near the current level.  The initial Fibonacci retracement level is also quickly approaching and could produce additional technical buyers at that 38.2% retracement.

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