Key Takeaways
- Intel shares plunged 19% in extended trading Thursday after the chipmaker reporter results that missed Wall Street’s estimates, issued soft guidance and unveiled a $10 billion cost-cutting plan that includes slashing 15% of its workforce. Monitor these crucial chart levels.
- The stock has continued to trend sharply lower on above-average volume since breaking down from an ascending channel in April.
- Intel shares may attract bargain hunters at historically significant price levels including $26, $20, and $13.
Intel (INTC) shares plunged in extended trading Thursday after the chipmaker reported quarterly results that missed Wall Street quarterly estimates, issued soft current-quarter guidance, and unveiled a $10 billion cost-cutting plan that includes slashing 15% of its workforce.
The stock, which has tumbled more than 43% from its December 2023 high, has come under heavy investor scrutiny this year amid the chipmaker’s sizable investment in manufacturing facilities to ramp up its loss-making foundry business, as it aims to capture market share from contract silicon giant Taiwan Semiconductor Manufacturing Company (TSM).
Shares fell 19% to $23.56 in after-hours trading, after shedding more than 5% during regular trading hours amid a broader selloff for chip stocks.
Below, we zoom out on Intel’s monthly chart to identify historically significant price levels that may come into focus amid the stock’s expected post-earnings drop.
Selling Conviction
Intel shares have continued to trend sharply lower after breaking down from a ten-month ascending channel in April. More recently, an attempt by bulls to reclaim the 200-month moving average in July proved futile, with the stock closing near its monthly low.
Importantly, above-average trading volume has accompanied the decline, indicating conviction by larger market players.
Monitor These Crucial Historical Support Levels
Amid the anticipated earnings-driven plunge, investors should monitor three crucial price levels on the chart where Intel shares may attract bargain hunters.
The first sits at $26. Although expected to open below this price on Friday, it’s worth watching if buyers can close the stock above a multi-year horizontal line that links multiple peaks and troughs from March 2005 all the way to March last year.
A breakdown below the above level could see the shares fall to around $20, where they would likely attract buying interest near the psychological round number and an important trendline that connects a range of comparable price action from the height of the dot-com bust in September 2001 through to February 2013.
An ongoing selling rout could lead to a test of the $13 area, a location on the chart last visited at the depths of the great recession between 2008 and 2009.
in addition to watching the levels outlined above, investors should also monitor for oversold readings in the relative strength index (RSI). The last time the indicator bottomed out below the 30 threshold in September 2022, Intel shares rallied around 95% over the following 15 months.
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