Technical Analysis – Intel back inside the rectangle; bearish tendencies intensify
April 25, 2023 1:27 pm
Intel stock settled yesterday at 29.60, below the 200-day simple moving average (SMA) for the first time since March 29. Actually, the stock has been trading inside a tight 24.63-31.27 rectangle that has formed since September 2, 2022 with the early April upside breakout proving to be a false one.
History suggests a retest of the rectangle lows, which coincides with the message conveyed by the momentum indicators. The Average Directional Movement Index (ADX) has returned above the 25-threshold as the D- sub-indicator is trading at the highest level since September 23, 2022. Similarly, the stochastic oscillator is dropping almost vertically and increasing its gap from the moving average. Regardless of the direction, both the convergence of the SMAs and the tight Bollinger Bands point to a sizeable move coming soon.
Should the bulls decide to take control of the market, the initial target would be to climb above the 200-day SMA. Higher, the 31.16-31.27 range defined by the November 15, 2022 high and the 23.6% Fibonacci retracement level of the March 30, 2022 – October 11, 2022 downtrend respectively appears tougher to break. The path then becomes trickier as the bulls would potentially face significant resistance at the April 2021 downward sloping trendline, just below the busy 35.20-35.48 range.
On the other side, the bears could target the 50- and 100-day SMAs at the 28.66-28.98 range. If successfully broken, their eyes could be set at the December 22 low of 25.29 and, more importantly, at the October 11 low of 24.63.
Putting everything together, neither side appears to be powerful enough to cause a sustained break of the recent rectangle. The sentiment though is currently favouring the bears.
Intel stock settled yesterday at 29.60, below the 200-day simple moving average (SMA) for the first time since March 29. Actually, the stock has been trading inside a tight 24.63-31.27 rectangle that has formed since September 2, 2022 with the early April upside breakout proving to be a false one.
History suggests a retest of the rectangle lows, which coincides with the message conveyed by the momentum indicators. The Average Directional Movement Index (ADX) has returned above the 25-threshold as the D- sub-indicator is trading at the highest level since September 23, 2022. Similarly, the stochastic oscillator is dropping almost vertically and increasing its gap from the moving average. Regardless of the direction, both the convergence of the SMAs and the tight Bollinger Bands point to a sizeable move coming soon.
Should the bulls decide to take control of the market, the initial target would be to climb above the 200-day SMA. Higher, the 31.16-31.27 range defined by the November 15, 2022 high and the 23.6% Fibonacci retracement level of the March 30, 2022 – October 11, 2022 downtrend respectively appears tougher to break. The path then becomes trickier as the bulls would potentially face significant resistance at the April 2021 downward sloping trendline, just below the busy 35.20-35.48 range.
On the other side, the bears could target the 50- and 100-day SMAs at the 28.66-28.98 range. If successfully broken, their eyes could be set at the December 22 low of 25.29 and, more importantly, at the October 11 low of 24.63.
Putting everything together, neither side appears to be powerful enough to cause a sustained break of the recent rectangle. The sentiment though is currently favouring the bears.
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