“Old school” technology stocks are making a comeback thanks to a newer trend: The Internet of Things is providing sustained demand for network infrastructure and technology hardware products.
Leaders among the old school technology pack include an old favorite: semiconductor giant Intel Corporation (INTC).
Year-to-date, Intel stock is barely above breakeven, but it’s the shorter-term price activity that should have investors interested in grabbing the shares before they breakout.
From a technical standpoint, Intel stock made a breakthrough in early November as it attracted the attention of technical traders. INTC garnered this attention in two ways:
First, a successful test of key technical support as shares tested their 50-day moving average, the most-watched trendline by technicians. The fact that Intel’s shares remained above this trendline means that more technical buyers are picking up INTC as it poises for a breakout.
Second, Intel stock completed a golden cross pattern as its 50-day moving average crossed above its 200-day. Historically, golden crosses are bullish for shares — and this certainly is the case for INTC. According to our research, Intel stock has scrawled out 10 golden crosses over the past 15 years, resulting in an average return that doubles the stock’s usual returns over six months.
Investor sentiment on Intel stock is mixed, and that’s bullish in our eyes — because shares aren’t overcrowded with investors yet.
Currently, 45% of the analysts on Wall Street are recommending Intel stock as a buy. This is well off of its high buy rating of 61% over the last year and leaves plenty of room for analysts to upgrade as shares break toward their highest level since 2003.
The trend is clearly favoring further upgrades, which will surge prices higher.
The bullish technical and sentiment backdrop paints a bullish outlook for Intel stock that is likely to outpace the S&P 500 and tech-heavy Nasdaq. Current models are targeting a break above the $36 level is likely to gain more attention from technical and program-driven investors, propelling INTC stock even higher.
Our current outlook targets a six-month price target of $40 — or 15% higher — barring any market meltdowns that could pressure the entire market.
Regardless, Intel stock is poised to beat the market and deserves a spot in growth-oriented investor’s portfolios.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
