Intel Corporation (NASDAQ: INTC) seems to be poised for a price surge as per its latest charts. INTC is the world’s largest semiconductor chip manufacturer by revenue and is the developer of the x86 series of microprocessors, the processors found in most personal computers.
#1 Falling Wedge Pattern Breakout: As you can see from the daily chart, the stock has been trading within a falling wedge pattern during the past few weeks. This is marked in the daily chart in purple color. Currently, the stock has broken out of the falling wedge pattern. A Falling Wedge Pattern is a bullish pattern. Once the stock breaks out from it, it has the potential to move further up.
#2 MACD above Signal Line: The daily chart shows that the MACD line (blue color) is currently above the MACD signal line (orange color). This is a possible bullish setup.
#3 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the daily chart. This indicates possible bullishness.
#4 Above MA: In the daily chart, the stock is currently trading above the 50-day SMA. This implies that the bulls are currently gaining control.
#5 Bullish ADX: The ADX line is starting to move up from below –DI and +DI lines. The +DI line and the ADX line are also currently above –DI line. This indicates possible bullishness.
#6 Uptrend Channel: The stock has been trading within an uptrend channel for the past several months. This channel is marked on the chart in pink color lines. The stock is currently moving higher after taking support at the bottom of the channel. This seems like a possible bullish sign.
#7 Bullish MACD: In the weekly chart as well, the MACD line (blue color) is currently above the MACD signal line (orange color). This is a bullish sign.
#8 Bullish Stochastic: The weekly chart shows that the %K line is above the %D line in the stochastic. This indicates that an upmove may be imminent.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for INTC is above a price of around $56.20.
TP: Our target prices are $62 and $66 in the next 4-6 months.
SL: To limit risk, place stop-loss below $53.00. Note that the stop loss is on a closing basis.
Our target potential upside is 10% to 17% in the next 4-6 months.
For a risk of $3.20, our target rewards are $5.80 and $9.80. This is an almost 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 3x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the trend channel and the falling wedge pattern breakout level with a high volume. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.
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