The day or more aptly, the month has come to finally consider buying Intel (NASDAQ:INTC) stock. Let’s examine what’s going on off and on the price chart to support this improved forecast, and offer a risk-adjusted way to improve an INTC stock purchase in your portfolio.
It has been a tough few months for INTC stock investors. And no doubt some of that backlash has been deserved. After scoring an all-time-high immediately in front of late April’s earnings release, weak quarterly results which saw declining data center sales and reduced guidance from INTC’s management throttled shares by 9% in the report’s immediate aftermath.
The fallout was compounded by an early May Intel analyst day event which largely appeared to confirm a tough road ahead with growing competition from rival Advanced Micro Devices (NASDAQ:AMD), a centerpiece for investors’ fears.
The net result on the INTC stock price chart saw shares tumble roughly 25% in less than a month. In a cruel twist of fate, late July’s earnings failed to deliver as well. After clawing their way back to April’s post-earnings reaction high in front of the quarterly announcement, Intel shares once again faltered. But don’t blame earnings.
A near month-long decline where INTC lost 14% into late August was mostly the direct result of pervasive trade war-driven market pressure. Intel’s fairly significant profit and sales beat, as well as upbeat guidance were plain and simply trumped—pardon the pun.
Where does that leave today’s INTC stock investors? With shares squarely at late July’s pre-earnings prices, Wall Street overall recalibrating its trade war concerns for the better these days, Intel’s stronger outlook and a price chart to support that optimism, it leaves investors in a good spot for buying INTC stock.
Monthly INTC Stock Price Chart
Intel stock’s pair of price corrections over May and August had more than a few reasons to support the possibility of a low. Still, technical questions needed to be answered first before buying. With that uncertainty replaced by clear confirmation, it’s time for investors to purchase a stronger-looking INTC stock price chart.
As the mocked-up monthly chart shows, layers upon layers of Fibonacci and trendline support dating all the way back to the financial crisis ten years ago produced a very wide area over which INTC shares could feasibly bottom. But there’s a large and meaningful difference in buying Intel at the top of zone support around $42.50 a share versus the range bottom near $28.
During INTC’s initial low, the top end of the support area was tested, but calling a bottom would have been premature. And by July and into August a lower high pattern and move back towards zone support warned a deeper bearish move could ultimately play out. But that hasn’t happened.
Despite September’s historically bearish tendencies, shares of INTC have actually confirmed a bullish higher low pattern on the monthly chart. It’s one also backed up by a supportive-looking stochastics setup that’s just moved out of oversold territory. Bottom-line: it’s time to buy Intel stock.
The initial upside target for taking profits in INTC stock would be a new high as shares challenge $60 and channel resistance.
Lastly, to keep the entry in good standing on the price chart, as well as contain risk to an appropriate amount relative to the profit objective, $48.45 looks like a reasonable exit without playing it too close to vest or waiting too long before conceding.
Investment accounts under Christopher Tyler’s management currently own positions in Advanced Micro Devices (AMD) and its derivatives but no other securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. . For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.