Key Takeaways
- Intel shares will likely remain in the spotlight on Monday following reports of an acquisition approach by Qualcomm and a possible $5 billion investment from asset manager Apollo Global Management.
- Since gapping sharply lower in early August, Intel shares appear to be carving out a double bottom, a classic chart pattern that signals a potential trend reversal.
- Friday’s rally occurred on the highest trading volume since an early August gap, suggesting healthy buying conviction behind the move.
- Investors should monitor key overhead price levels on Intel’s chart at $22, $25, $30, and $35.
Intel (INTC) shares will likely remain in the spotlight on Monday after Bloomberg reported on Sunday that asset manager Apollo Global Management has offered to invest as much as $5 billion in the struggling chipmaker.
The weekend news came after The Wall Street Journal reported on Friday afternoon that Qualcomm (QCOM) has approached intel about a potential acquisition.
Intel Chief Executive Officer Pat Gelsinger recently outlined a comprehensive plan to turn around the troubled chipmaker and revive its slumping stock price.
Since the start of the year, Intel shares have lost more than half their value but recovered around 11% last week as investors cheered recent developments. The stock gained 3.3% on Friday to close at $21.84
Below, we’ll take a closer at the technicals on Intel’s chart and identify important overhead price levels to watch out for as the stock makes a recovery attempt.
Potential Double Bottom
Since gapping sharply lower in early August, Intel shares appear to be carving out a double bottom, a classic chart pattern that signals a potential trend reversal.
It’s also worth pointing out that as the formation’s second trough made a lower low, the relative strength index (RSI) made a relatively shallower low, indicating waning selling momentum.
More recently, Friday’s rally occurred on the highest trading volume since Aug. 2 gap, suggesting healthy buying conviction behind the move.
Key Overhead Price Levels to Watch
Amid further bullish price momentum, investors should monitor several important overhead levels on Intel’s chart.
The first sits around $22, an area just above Friday’s close where the shares will likely encounter resistance near the possible double bottom pattern’s neckline.
A volume-backed breakout above this key technical level could act as a catalyst for buying up to the $25 region, where the shares could run into overhead resistance from a trendline connecting two prominent swing lows in October 2022 and late February last year.
Further upside could see the stock rally into the key $30 area, a level on the chart where investors who bought the August and September lows may look to lock in profits near a multi-month trendline linking multiple peaks and troughs from November 2022 to late June this year.
Finally, a longer-term trend higher may lead to a retest of resistance near $35, where the shares could encounter selling pressure near a horizontal line joining a series of comparable trading levels between June 2023 and July this year. This area on the chart could also find resistance from the downward sloping 200-day moving average and the 50% Fibonacci retracement level using a grid measured from the December high to the September low.
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