Intel Corporation (INTC) - Get Report reported strong second-quarter results on Thursday after the close, sparking an impressive rally Friday morning. INTC stock ran up nearly 2% in the early going before hitting a road block near its declining 200-day moving average. INTC is fading a bit now but a major base now appears to be in place with layers of support just above. Investors should view the stock as a buy on weakness in the near term. 

Beginning in the second week of June, Intel was showing signs of weakness. Two weeks later INTC stock had reached new 2017 lows after blowing through a major support zone near $35. Intel fell all the way down to its pre-election lows before it was able to regain its footing. In late June and early July the stock built a new base near the $33.50 support zone. The rally that followed left behind what could develop as a major bottom as earnings approached.

Intel is pulling back now from its 200-day moving average, a level that provided solid support at key points after the election. As this plays out, patient bulls should keep a close eye on the $35 to $34.50 area. This initial support zone includes the stock's February and March lows as well as last week's high. A dip back down to this zone will provide a very low-risk entry opportunity for patient investors. On the downside, a close back below $34.30 would violate this week's lows sending a clear sign that the declining-200 day moving average is in control of the action.

Intel shares were up 1.1% to $35.35 early Friday afternoon.

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At the time of publication, Gary Morrow was long INTC.