Key Takeaways
Intel ( INTC ) shares will likely remain on watchlists Tuesday, a day after the embattled chipmaker said CEO Pat Gelsinger had stepped down and will be replaced by a pair of interim co-CEO’s as it searches for a permanent replacement.
Gelsinger, who joined the chip giant in February 2021, had come under increasing pressure this year as the company implemented a turnaround plan that spurred significant job losses and the divestiture of some assets. Intel has been struggling to reclaim lost market share from its chipmaking rivals and restore investor confidence.
Since the company reported a wider-than-expected net loss for the second quarter in August, weeks of speculation about strategic changes and reports of deal activity have continued to swirl, but failed to boost investor confidence. Although Intel shares have recovered slightly over the past month, they have still lost more than half of their value since the start of the year.
The stock rose as much as 6% on Monday following news of Gelsinger's departure, but finished the session down 0.5%. The stock was little changed in premarket trading Tuesday at around $24.
Below, we take a closer look at Intel’s chart and turn to technical analysis to point out several key price levels worth watching out for.
Selling Volume Increases
After gapping more than 25% lower in early August, Intel shares have traded within an orderly ascending channel , with the price tagging both sides of the pattern on several occasions since that time.
More recently, the stock dropped towards the 50-day moving average (MA) on the highest volume in more than a month Monday, indicating selling conviction behind the move.
Meanwhile, the relative strength index (RSI) continues to retreat from overbought levels, falling below 50 yesterday to signal weakening price momentum.
Let’s look at key support and resistance levels on Intel’s chart that investors are likely monitoring.
Key Support Levels to Watch
A decisive breakdown below the 50-day MA could see shares decline to around $22. Investors may look for buying opportunities in this area near the opening price of the early-August gap, which also aligns with a range of similar trading levels on the chart between late August and early November.
Selling below this level opens the door for retest of lower support at the $18.50 level, a location around 23% below Monday’s closing price where bargain hunters could look for entry points near the September low.
Important Resistance Levels to Monitor
The first overhead level to monitor sits around $30. This area on the chart finds a confluence of resistance from the 200-day MA and lower range of a narrow consolidation period that formed on the chart between May and June.
Finally, a more bullish move could propel a rally up to the $37 level. Investors who have purchased Intel shares at lower prices could look to lock in profits near a multi-month trendline that connects a series of peaks on the chart from June 2023 to July this year.
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