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Intel Stock: One Thing Stands Between It and Another 11% Decline

Intel stock is dropping after its earnings report, but a further 11% decline could be in the cards unless Intel holds a key support level.

Shares of Intel  (INTC) - Get Intel Corporation (INTC) Report are getting hit on Friday in a high-volume selloff.

The stock is down more than 11% this afternoon on what’s looking like Intel’s highest-volume session since January.

With the stock’s post-earnings decline, the shares are within pennies of making new 2021 lows.

While Intel beat on earnings expectations, revenue results disappointed investors. Further, the company’s outlook was a disappointment as well.

Given the reaction we’re seeing in some of these older tech plays, investors simply aren’t gobbling up slow growth tech stocks, even if the valuations are low.

How the Long Tech Rally Evolved

Investors saw a similar situation earlier this week with International Business Machines  (IBM) - Get International Business Machines (IBM) Report.

Just as IBM is struggling against its high-growth peers in the cloud, Intel is struggling against Advanced Micro Devices  (AMD) - Get Advanced Micro Devices, Inc. Report and Nvidia  (NVDA) - Get NVIDIA Corporation Report with its chips.

Is the latest dip enough to entice bulls to get on board?

AMD and Nvidia are holdings in the Action Alerts PLUS member club. Want to be alerted before the club buys or sells AMD and NVDA? Learn more now.

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Trading Intel Stock

Daily chart of Intel stock.

Daily chart of Intel stock.

Look at the daily chart before the company reported earnings. It was actually pretty good!

The stock was above the monthly VWAP measure, along with the 50-day, 50-month and 200-week moving averages. Intel stock was breaking out over downtrend resistance and looking to make a push higher.

The post-earnings reaction leaves the chart in disarray.

The stock gapped below the prior October low at $51.87, as well as the third-quarter low at $51.42.

If Intel stock finds its footing and rebounds back over $50, it will be vital to see how it handles these two levels. Even more pressing will be the 50-month moving average, which comes into play near $52.

On the downside, we really don’t have much to work with. There isn’t a moving average nearby on the daily, weekly or monthly charts.

If we zoom all the way out to the quarterly chart, the 21-quarter moving average comes into play at $49.42, a level that Intel stock is currently near.

Aggressive bulls can be long Intel stock so long as it’s above this level on a closing basis. But conservative bulls will want something more than this to justify being long.

If this somewhat obscure measure fails to hold as support, the $44 to $45 area could be in play, representing a further loss of about 11% from current levels.