What you need to know
- Intel’s shares are likely to remain on the watchlists for Tuesday. A day earlier, embattled chips maker Pat Gelsinger announced he was stepping down as CEO and would be replaced by two interim co-CEOs while it searched for a permanent successor.
- On Monday, the stock fell to the 50-day average with the largest volume since more than a year. This indicates that the drop was backed by a strong selling sentiment.
- Investors should watch key support levels on Intel's chart around $22 and $18.50, while also monitoring resistance levels near $30 and $37.
Intel shares (INTC) will remain in the spotlight Tuesday after Intel said that its CEO Pat Gelsinger resigned. He will be replaced with a duo of interim coCEOs, while they search for a replacement.
Gelsinger who has been with the chip giant since February 2021 was under increased pressure as the company implemented its turnaround plan, which led to significant job cuts and divestiture. Intel is struggling to recover lost market shares from its rivals in the chipmaking industry and restore investor trust.
Investor confidence has not been boosted since the company announced a larger-than-expected loss in the second quarter of August. Weeks of speculation and news of deals have continued, but this did little to improve the situation. Intel’s shares may have gained a little in the last month but they still have lost over half their value from the beginning of the year.
The stock rose as much as 6% on Monday following news of Gelsinger's departure, but finished the session down 0.5%. In premarket trade on Tuesday, the stock price was around $24.
We will look closely at Intel’s chart, and then turn to the technical side of things to identify some key levels in terms of price.
Sell More – Increases in Sales
Intel’s shares, which gapped more than 25 percent lower at the beginning of August, have since traded in an ascending pattern, the price having tagged both ends on multiple occasions.
The stock has dropped to the 50-day MA on Monday with the largest volume since more than a year, showing that the sellers are confident.
The relative strength (RSI), which is a measure of price momentum, continues to decline from its overbought level. Yesterday, it fell below 50, signaling a weakening in the market’s momentum.
Investors are most likely watching the key levels of support and resistance on Intel’s chart.
The Key Support Levels To Watch
If the shares fall below the MA 50 days, they could reach around $22. Investors can look to buy in the area around the gap opening of early August, as this aligns well with the range of trading levels between late august and early novembre.
If you sell below this price, it opens up the possibility of a retest at $18.50. This is a level around 23 percent below the Monday closing price. Bargain hunters can look for entry levels near the low in September.
Watch for important Resistance Levels
Around $30 is the first level of overhead to be monitored. The 200-day MA is confluent with the lower range of the narrow consolidation period formed between May and July.
Finaly, a bullish trend could push the price up to $35. Investors that have bought Intel at a lower price could lock in their profits around a trendline connecting a series peaks from the June 2023 chart to July of this year.
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