
Intel Extends Rally Into Heavy Resistance Area
Intel (INTC) - Get Report has had an explosive rally off the Aug. 24 spike low. At last week's high, the stock had recovered all of its summer swoon following a 40% surge in just under eight weeks. This powerful move is beginning to appear over-extended as a very heavy resistance zone is challenged. For investors, a healthy pullback may soon begin offering patient bulls a low-risk entry opportunity.
July began with an ugly selloff for Intel. The stock had peaked near $34.75 as June came to a close before shares slid for seven straight sessions. This losing streak was the initial stage of a deep selloff that would eventually push the stock 33% below its 2015 peak. Intel finally bottomed on Aug. 24 just below the $25 level. The rebound that followed took half as much time to recover all of the post-May selloff as the June-through-August flush took to play out -- an amazing turnaround, to say the least.
In the near term, Intel will need a healthy pullback before the current bull run extends. On Friday, the stock reached the area near the February, May and June highs. This level near $34.75 represents the lower band of a significant resistance area. The upper band is marked by the huge breakdown gap left behind back on Jan. 27. This damaging gap is also near the stock's 2014 peak of $35.55. As Intel churns in this zone, it may prove wise for investors to take a more neutral stance on the stock. A fade from here is likely and will give the stock a well deserved rest.
Intel bulls should keep a close eye on the $32.60 area. This is the initial layer of near-term support. A base here would allow the current overbought reading in the moving average convergence/divergence to be worked off and set the stage for a new rally leg.
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Disclosure: This article is commentary by an independent contributor. At the time of publication, the author was long INTC.









