Key Takeaways
- Intel shares hit their highest level in 18 months Friday morning after the chipmaker swung to a profit that sailed past Wall Street expectations, signaling its closely watched turnaround plan is gaining traction.
- Intel shares have consolidated in a rectangle formation throughout most of October, setting the stage for a continuation of the stock’s recent uptrend.
- The measured move technique projects a near-term bullish target of $49. Investors should also watch important support levels on Intel’s chart around $36, $32 and $29.
Intel (INTC) shares rose Friday morning after the chipmaker swung to a profit that sailed past Wall Street expectations, signaling its closely watched turnaround plan is gaining traction.
CEO Lip-Bu Tan, who took the helm in March and has refocused the company’s strategic direction, said the third-quarter results show Intel’s “steady progress” in its turnaround, adding that demand for AI has created “attractive opportunities” across its portfolio.
The stock was up 1.2% at $38.60 in recent trading, after surging above $41 early in the session to its highest level since April 2024. Coming into today’s session, the stock had risen 90% so far this year, with the lion’s share of those gains coming in recent months as investors cheered multi-billion dollar investments from Nvidia (NVDA) and SoftBank (SFTBY), as well as the U.S. government’s 10% stake in the chipmaker.
Below we analyze the technicals on Intel’s chart and identify important post-earnings price levels worth watching out for after the quarterly report.
Rectangle Formation Breakout
Intel shares have consolidated in a rectangle formation throughout most of October, setting the stage for a continuation of the stock’s recent uptrend.
The trend for the stock has remained bullish since it broke out from a multi-month trading range in September, shortly after the 50-day moving average (MA) crossed above the 200-day MA to form a golden cross, a chart pattern that signals a sustained upward trend.
Let’s apply technical analysis to project a potential near-term bullish target on Intel’s chart and also identify important support levels worth watching during future retracements.
Measured Move Bullish Target
Investors can project an upside target on Intel’s chart by using the measured move technique, also known by chart watchers as the measuring principle.
When applying the analysis, we calculate the distance of the strong move higher that preceded the rectangle in points and add that amount to the formation’s top trendline. For example, we add $10 to $39, which projects a target of $49.
Important Support Levels Worth Watching
During pullbacks in the stock, investors should initially watch the $36 level. This area on the chart could provide support near the base of the rectangle formation and a cluster of prices situated just below the July 2024 swing high.
A close below this level could see the shares retreat to around $32. Investors may look for buying opportunities in this area near the high of last month’s breakaway gap and a sideways trend that formed on the chart between April and July last year.
Finally, selling below this level opens the door for a retest of a lower trading floor near $29. Intel shares may find support in this location around the late September low, which also closely aligns with the Aug. 1, 2024 closing price that preceded the stock’s significant gap lower the following day.
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As of the date this article was written, the author does not own any of the above securities.
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