Intel Shares Surge Over 6% on Monday
Intel (INTC) shares experienced a significant surge of more than 6% on Monday, reaching a two-month high. Analysts at Melius Research have highlighted that the chipmaker is poised to benefit from the increasing interest in artificial intelligence (AI) personal computers and other hardware trends associated with this technology. This positive news propelled Intel to become the top gainer on both the Nasdaq 100 and Dow Jones Industrial Average on Monday.
Breakout From Narrow Trading Range
Despite facing challenges earlier in the year with the 50-day moving average crossing below the 200-day moving average, resulting in a death cross in early May, Intel shares have managed to trade within a narrow range with notable volume spikes since then. The breakthrough on Monday saw the stock gap above the top trendline of the trading range on the highest share turnover since June 21. This breakout signifies strong bullish sentiment among investors. Additionally, the relative strength index (RSI) has entered overbought territory above the 70 thresholds, confirming robust price momentum.
Key Levels to Monitor
As Intel continues its upward trajectory, it is essential for investors to keep an eye on specific key levels where the shares might encounter resistance.
The initial area of interest is around $35.50, which corresponds to a minor countertrend retracement during the stock’s downward movement in April. Breaking through this level could pave the way for a retest of a crucial horizontal line near $39, connecting the prominent September 2023 swing high with the 200-day moving average.
If Intel manages to surpass this hurdle, the next target could be around $42, where potential selling pressure may arise near a trendline linking four price troughs between December 2023 and March this year. A sustained rally could propel the price towards $45.50, aligning with a horizontal line that connects various price peaks over a five-month period from November to April.
Short-Term Considerations
While the overbought reading on the RSI indicates strong price momentum, it also raises the likelihood of a short-term retracement or gap fill. During such temporary pullbacks, investors should pay attention to the previous trading range’s top trendline around $32, which has likely transitioned from a resistance zone to a support level.
It is important to note that the views expressed in this article are for informational purposes only and do not constitute investment advice. Investors should conduct their own research and consult with financial professionals before making any investment decisions.
As of the writing of this article, the author does not hold any positions in Intel or related securities.
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