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Intel Plans Mobileye IPO. What Does the Stock Chart Say?

Intel stock is rallying news that it will IPO its Mobileye business next year. Does that make the stock a buy?

Intel  (INTC) - Get Intel Corporation Report stock has been a clear laggard.

Not only has it badly lagged the Nasdaq and S&P 500, but it’s also lagged its peers.

Advanced Micro Devices  (AMD) - Get Advanced Micro Devices, Inc. Report has made up incredible ground against Intel over the years, while Nvidia  (NVDA) - Get NVIDIA Corporation Report has continued to dominate as a top semiconductor stock.

Delays to its 7nm chip last year dealt Intel a painful blow and allowed AMD to gain even more momentum.

At one point, there was hope that Intel could be an autonomous driving leader, particularly after its acquisition of Mobileye for $15.3 billion in 2017.

However, Nvidia has found a way to lead the autonomous driving charge — at least from a chip perspective.

Now looking to unlock some value, Intel plans to IPO its Mobileye unit. The spinoff would take place next year and could value the entity at $50 billion.

Initially, Intel stock climbed 7.9% on the news, but it currently sports gains of just 4.4%. After Monday’s 3.5% rally, some investors are wondering if it’s time to buy Intel stock.

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Daily chart of Intel stock.

Daily chart of Intel stock.

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Shares recently gapped lower in October on disappointing earnings, a gap that Intel filled today as it pushed toward $55.

Now dipping from those highs, bulls are looking to see where the stock finds support.

So far, buyers are stepping in near the 200-week moving average. Should this measure fail, let’s see if the stock can stay above its November high near $52.

If it can push up through this month’s new high near $55, then it could have a potentially large test looming just ahead — technically speaking anyway.

That comes at the $56 to $56.50 area, where Intel stock finds its 50-week and 200-day moving averages, as well as the weekly VWAP measure.

If Intel can clear this area, the stock could push higher, potentially putting another large gap-fill in play at $62.28. 

Above that and the $67.50 to $70 resistance area will be the next focus, but that is a long ways off. For now, let's see if the stock can hold current support. 

Remember, Intel stock has been a massive under-performer against the broader market and its peers. That goes for both long-term and short-term measures.

That doesn’t mean it can’t rally, but Intel is a prove-it stock because of its serial underperformance.