Intel Stock Is Inching Towards a Bullish Breakout

Intel Stock
Credit:iStock.com/jejim

INTC Stock: The Predominant Trend Supports Higher Stock Prices

Watching Intel Corporation (NASDAQ: INTC) stock has not been the most endearing activity because the lack of progress is becoming mind-numbing. I have been watching INTC stock for a particular reason; I have the inclination to believe that a move towards higher stock prices is in the making. This belief is based on the price action and indications that have been generated on the Intel stock chart.

Using a company’s stock chart to generate a view on a potential investment is known as technical analysis. This method of investment analysis is predicated on the notion that historical data can be used to project what the future may bring. This may sound like an outlandish concept, but I can attest that when this method is applied correctly, the results are both outstanding and mind-boggling.

The following Intel stock chart illustrates the developments on the stock chart that have me believing that a move towards higher stock prices is in development.

intel price chart

Advertisement

Chart courtesy of StockCharts.com

This INTC stock chart has been annotated in order to highlight the constructive price action that has been dominating the trading action.

Also Read3 Reasons Intel Stock Could Grow in 2017

Constructive price action consists of impulse waves and consolidation waves. These waves, in an alternating wave structure, form the necessary building blocks to create and sustain a trend.

The impulse wave defines the stage in a bullish trend where the stock stages a move towards higher stock prices. A consolidation wave defines the stage in a bullish trend where the stock price corrects in order to unwind any overbought conditions that were created during the impulse wave that preceded it. Unwinding an overbought condition creates the necessary environment so a new impulse wave can develop.

INTC stock is currently within the confines of a consolidation wave, and 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.

The moving average convergence/divergence (MACD) indicator located in the lower panel is suggesting that resistance outlined by the consolidation wave is set to be tested. MACD is a trend-following momentum indicator that is used to distinguish between bullish and bearish momentum.

The MACD indicator has had an impeccable track record of confirming whether an impulse wave or a consolidation wave is in development.

In May 2016, a bullish MACD cross correctly suggested that an impulse wave was in development.

In October 2016, a bearish MACD cross correctly suggested that a consolidation wave was in development.

In July of this year, a bullish MACD cross was generated, which is suggesting that an impulse wave is now in development. This notion will be confirmed once the Intel stock price exits the consolidation wave in an upward direction by closing above $37.50.

I mentioned that watching Intel stock has been a painstaking ordeal, but I have always had the inclination to believe that a move toward higher prices was in development because the longer trend continues to support this notion.

The following stock chart is why I have the inclination to believe that the consolidation wave currently in development will resolve itself in a bullish manner.

intel stock chart

Chart courtesy of StockCharts.com

This INTC stock chart highlights a bullish trend that began in the aftermath of the financial crisis. This bullish trend contains the quintessential characteristic that defines all bullish trends, which is series of higher highs and higher lows that causes the stock price to travel from the lower left of the price chart to the upper right.

This bullish trend is easily captured using a simple uptrend line. This uptrend line is created by connecting the series of lows that defined this bullish trend. This uptrend line acts as a defined level of price support, and as long as Intel stock is trading above it, I can only presume that a bull market is still in development, and therefore, higher stock prices will prevail.

This notion is why I continue to believe that the current consolidation wave in development will resolve itself in a bullish manner. It is developing right on top of this uptrend line, and as long as it trades above, it I will continue to hold a bullish view on the stock.

The only way this view will ever be swayed is if INTC stock breaks below the uptrend line, indicating that the bullish trend that began in 2009 has finally concluded.

Analyst Take: 

I am watching the trading action on INTC stock chart because I have the inclination to believe that a bullish move towards higher stock prices is only moments away from occurring. This belief will be confirmed when Intel stock closes above $37.50, which will open the door to much higher stock prices.