Don't Ignore This Chart

Intel Testing Key Short-Term Support

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On October 26th, Intel (INTC) posted quarterly earnings results and beat both revenue and EPS estimates.  It resulted in a very strong gap higher the next morning and then INTC continued rising, tacking on another 10% within a week.  But INTC became very overbought with an RSI above 90 and needed a pullback.  Since topping in early November, INTC has lost close to 10% and is now testing the top of gap support and its rising 50 day SMA:

The RSI has fallen back into the 40s (black arrow) and that's typically a level where we see prices turn higher again in an uptrend.  The huge rally in September and October began after an RSI 40 test in August so I like the odds of a similar reversal at or near the current level.  The initial Fibonacci retracement level is also quickly approaching and could produce additional technical buyers at that 38.2% retracement.

Happy trading!

Tom

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Tom Bowley
About the author: co-founded Invested Central and served as the site's Chief Market Strategist for more than 10 years. His unique trading style combines both his fundamental and technical strategies to systematically manage risk while trading. A regular contributor to StockCharts.com's bi-weekly ChartWatchers newsletter since 2006, Tom's role at StockCharts has expanded significantly since he joined the company as a full-time Senior Technical Analyst in March of 2015. Learn More
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