INTC Stock Is Geared Toward Higher Stock Prices
Watching Intel Corporation (NASDAQ:INTC) stock has been frustrating, to say the least. This frustration stems from the stock’s inability to gain any traction as the equity markets continue to forge new highs. This discouraging news only gets compounded, knowing that Intel stock’s competitors have been putting up stellar performance numbers.
Does this mean I have given up hope on INTC stock? Absolutely not, because my views are predicated on the indications that are generated on the Intel stock chart, and these indications continue to suggest that the path of least resistance is geared toward higher stock prices.
For anyone who hasn’t frequented my previous publications, I generate my views on investments using technical analysis. This method of investment analysis is based on using historical price and volume data to project where the stock price is heading. I have been perfecting my craft in this method for nearly two decades, and all my investment strategies are based on it.
The following Intel stock chart illustrates a simple tool that has defined the entire bullish run in INTC stock following the aftermath of the financial crisis.
Chart courtesy of StockCharts.com
This INTC stock chart highlights the bullish trend that began in 2009, using an uptrend line. This uptrend line is created by simply connecting the significant lows that followed. The uptrend line captures the quintessential characteristic that defined this bull market advance, which is a series of higher highs and higher lows. This resulted in a stock chart in which the price traveled from the lower left to the upper right, which is what we would love to see all our investments perform.
Also Read: 3 Reasons Intel Stock Could Grow in 2017
This uptrend line not only defines the bull market advance, but also acts as a dividing line that defines risk in this investment. As long as Intel stock is trading above this uptrend line, I can only assume that the bull market that began in 2009 is still intact, and that higher prices are likely to continue.
Breaking below this uptrend line would serve to suggest that the bull market that began in 2009 has finally concluded, suggesting that lower prices were likely to prevail. As part of an investment strategy, this uptrend line would act to define risk. Therefore, breaking below it would suggest the need to exit any long positions.
The following Intel stock chart highlights the constructive price action that is occurring above the uptrend line.
Chart courtesy of StockCharts.com
This INTC stock chart illustrates the constructive price action that has been occurring above the uptrend line. Constructive price action consists of impulse waves and consolidation waves. In an alternating wave structure, these waves create the necessary buildings blocks to sustain a long-term trend.
An impulse wave defines the period in a bullish trend when a stock stages an advance. Once this advancement in the price is finished, a consolidation wave develops. The consolidation wave defines the period in a bullish trend when the stock price pulls back from its highs. This price action serves to unwind any overbought conditions that were created during the impulse wave. Unwinding an overbought condition creates the necessary environment for a new impulse wave to develop, which allows the cycle to continue.
INTC stock is currently within the confines of a consolidation wave. In order to suggest that a new advancing impulse wave is in development, the stock price needs to exit the wave in an upward direction.
A bullish resolution of the consolidation wave is already being suggested by the moving average convergence/divergence (MACD) indicator. MACD is a momentum indicator that is used to distinguish between bullish and bearish momentum. This indicator has been instrumental in confirming whether an impulse wave or a consolidation wave is in development.
In May 2016, a bullish MACD cross suggested that bullish momentum was influencing the stock price, and an impulse wave developed as a result.
In October 2016, a bearish MACD cross suggested that bearish momentum was influencing the stock price, and a consolidation wave developed as a result.
At this moment, a bullish MACD cross is being generated, which suggests that bullish momentum is once again influencing the trading action in Intel stock, which will pave the way toward higher prices. This suggests that the stock price is set to exit the consolidation wave in an upward direction, and that a new impulse wave will take its place. Intel stock seems ready to make a long-awaited advance.
Bottom Line on Intel Stock
Even though I’m frustrated with the performance of this stock, there are still indicators on the INTC stock chart suggesting that the path of least resistance continues to be geared toward higher stock prices.