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Intel Earnings Preview: A Look at Support and Resistance

Intel has had a lot of momentum lately. Can the bulls maintain that run? Let's look at the chart.

Shares of Intel  (INTC) - Get Intel Corporation Report have been rather disappointing. That is, until  recently. Can the stock carry its newfound momentum into earnings?

The chip giant is scheduled to report its fourth-quarter earnings after the close of trading on Thursday.

The stock has risen more than 11% since Jan. 12, after the company announced a replacement for its CEO.

While Intel is up more than 30% from its lows one month ago, the rebound has done little to please longer-term investors. For instance, shares remain 14.5% below the one-year highs, set on Jan. 24, 2020.

Further, it has been an enormous laggard compared with Nvidia  (NVDA) - Get NVIDIA Corporation Report and Advanced Micro Devices  (AMD) - Get Advanced Micro Devices Inc. Report. While Intel stock is essentially flat year over year, Nvidia and AMD have jumped 118% and 76%, respectively.

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Trading Intel 

Daily chart of Intel stock.

Daily chart of Intel stock.

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Since announcing its management change, notice how well the stock has done to maintain its gains. However, the initial rally filled the gap near $60, while the 61.8% retracement has been acting as resistance.

For bulls to maintain their recent momentum, they’ll need to see Intel stock clear this area, taking out last week’s high at $60.25.

If it can do that, I want to see if Intel has enough energy to get up to the $64 to $65 area. In that zone, shares face the 78.6% retracement, followed b the June  $65.11. That is the highest price Intel has achieved since the painful pullback in March.

Above that and a larger timeframe target of $69 can be used.

If the post-earnings reaction is bearish, I want to see if the $56 area acts as support. This price was resistance in October, but key support in Q2. Further, Intel stock will also have its 10-day moving average nearby.

Below that opens the stock up to a gap fill down at $53.85, along with the 200-day moving average near $53.50. If the first layer of support doesn’t hold, I want to see if this layer will. 

If Intel stock falls below both levels, it could put the 200-week moving average on the table.