Shares of Intel Corporation (NASDAQ:INTC) had a good run off their August lows along with the broader market. After coming close to breaking down at key technical support levels in late August, Intel stock put its gears in reverse and has since managed to wiggle itself into a very constructive pattern that has the bulls salivating.
Tack on the fact that large-cap tech still is displaying relative strength, and we have a compelling reason to believe in INTC stock.
On Oct. 2, I opined that Intel stock was getting ready for a fourth-quarter rally. I pointed to some compelling areas of support on INTC’s stock charts that put the odds in the bulls’ favor. Since then, Intel shares have rallied about 17% to reach the upper end of my price targets.
So, it has already been a great trade, but thanks to a breather in Intel stock, shares have made constructive strides that speak to higher prices into year’s end and possibly into early 2016.
Intel Stock Charts
Before looking at the closer-up picture, let’s gain some perspective from the multiyear chart.
The pullback in August led Intel stock to retest and marginally break below a critical area of former resistance, namely the black horizontal line around the $28-$29 area. While INTC did close below this line for one week in mid-August, the following week’s bullish reversal candle quickly ushered Intel stock back into a more constructive posture — one that ultimately led to this black horizontal to hold as support.
In short, the retest of this line was important and is a core reason to believe that some further upside in INTC stock should be ahead.
On the daily chart, we note that after breaking back above its red 200-day moving average in the first half of October, Intel stock rallied back into horizontal resistance around the $34-$35 area and as marked by the black horizontal. INTC then pulled back to its 200-day moving average and made another rally attempt at horizontal resistance.
While historical seasonal weakness into mid-December could still keep this stock consolidating, ultimately a break past resistance and above $35 looks promising for a run into $37-$38.
Any sharp bearish reversal upon a break above $35 should, as always, be respected.
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Successful trading and investing starts with a plan. Download Serge’s essential trading plan, The Essence of Swing Trading e-book. As of this writing, he did not hold a position in any of the aforementioned securities.
