Chipmaking giant Intel ( INTC) has shown tremendous relative strength lately, rallying 27% in the last quarter vs. a 3.5% gain in the S&P 500. Now the question is whether that outperformance can continue.

While stocks with high relative strength are statistically more likely to continue to outperform in the three-to-10-month timeframe, we need something more actionable to justify taking a trade in this stock. That actionable item is Intel's test of $25.50 resistance this week.

Yesterday, shares broke out to a new 52-week high of $25.78, pushing through that $25.50 level in the process. Now it's going to be important to watch whether Intel's shares pull back. If shares can hold out above that $25.50 level, the buy signal for this stock comes on its next white bar day.

Intel, one of the top-yielding electronics stocks, is one of Warren Buffett's new buys in the third quarter. It also shows up on a recent list of 5 Cash-Rich, Low-P/E Stocks.

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