Key Takeaways
- Intel shares jumped Tuesday following news the embattled chipmaker plans to slash hundreds of jobs as part of previously announced cuts under a broader restructuring effort.
- The stock broke out from a flag pattern, potentially setting the stage for another leg higher.
- Investors should watch major overhead areas on Intel’s chart around $26 and $30, while also monitoring support levels near $22 and $19.
Intel (INTC) shares jumped Tuesday following news the embattled chipmaker plans to slash hundreds of jobs as part of previously announced cuts under a broader restructuring effort.
Intel shares have gained 18% since the start of the year, boosted by hopes that recently appointed CEO Lip-Bu Tan can turn around the fortunes of the once-storied chipmaker and optimism about potential deals, including selling parts of its business. However, the stock has lost just under a third of its value over the past 12 months, weighed down by the company’s failure to capitalize on the booming AI chip market and uncertainty surrounding its strategic direction.
Intel shares rose more than 7% to close Tuesday’s session at $23.59, it’s highest level since late March. The stock was the biggest gainer in the Nasdaq 100 on Tuesday.
Below, we take a closer look at Intel’s chart and use technical analysis to identify major price levels that investors will likely be watching.
Flag Pattern Breakout
After reclaiming the 200-day moving average (MA) late last month, Intel shares retraced toward the closely watched indicator within a flag, a chart pattern that signals a continuation of the stock’s recent move higher from the floor of a multi-month trading range.
Indeed, the price staged a decisive breakout from the pattern in Tuesday’s trading session, potentially setting the stage for another leg higher. Moreover, the relative strength index confirms bullish price momentum but sits below the indicator’s overbought threshold, proving ample room for further upside.
Let’s identify two major overhead areas to watch on Intel’s chart if the shares continue to gain ground and also point out support levels worth tracking during future retracements in the stock.
Major Overhead Areas to Watch
Firstly, investors should watch how the stock responds to major overhead resistance around $26. The shares could encounter significant selling pressure in this area near a series of prominent peaks that formed on the chart in November, February, and March. This area also roughly aligns with a projected bars pattern target that takes the stock’s move higher that preceded the flag and repositions it from Tuesday’s breakout point.
Buying above this area could see the price rally toward $30. Investors who have accumulated shares during the stock’s extended rangebound period may place sell orders in this region near a sideways trough that developed on the chart throughout May and June last year.
Support Levels Worth Monitoring
During retracements in the stock, it’s worth monitoring the $22 level. This area could attract buying interest near the 200-day MA and a trendline that links a series of corresponding trading activity on the chart stretching back to last August’s notable gap lower.
Finally, a close below this level could lead to a retest of lower support around $19. Investors may look for buy-and-hold opportunities in this location near a horizontal line that marks the floor of the stock’s multi-month trading range.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.
As of the date this article was written, the author does not own any of the above securities.