Only Moments Away from a Major Breakout in Intel Stock
INTC Stock: Launch Sequence Initiated
Intel Corporation (NASDAQ:INTC) stock is on the verge of confirming a price pattern that suggests much higher prices are likely to follow. In order to achieve this result, Intel stock needs to surpass one final hurdle, and then the sky will truly be the limit.
This idea of higher prices is based on the price action that has developed on the INTC stock chart. Using a price chart to generate an investment bias is known as technical analysis. I have been using this style of investment analysis to generate my investment views and trading strategies for close to two decades. This style of investment analysis is based on the notion that past price and volume data can be used to discern trends and forecast future prices.
The following Intel stock chart illustrates the pattern that suggested a bullish view was warranted.
Chart courtesy of StockCharts.com
The Intel stock chart above illustrates the healthy bullish price action that continues to suggest that higher prices are likely to follow. This healthy bullish price action is defined by impulse waves that advance price, and consolidation waves that unwind overbought conditions and then set up the next impulse wave.
The price advance that is highlighted in green constitutes the impulse wave, and the sideways trading action that is highlighted in purple constitutes the consolidation wave.
When Intel stock exited the consolidation wave in an upward direction, it suggested that a new impulse wave was set to develop. This bullish view was supported by the indicator in the lower panel labeled “MACD”‘
The moving average convergence/divergence (MACD) indicator is a simple and effective trend-following momentum indicator. Signal-line crossings are used to distinguish between bullish momentum and bearish momentum. A bullish cross was generated in August 2016, suggesting that bullish momentum had overwhelmed any bearish momentum and higher prices were likely to follow.
After price exited the consolidation wave, Intel stock rose and then returned to backtest the consolidation pattern from above. The last hurdle that is required to confirm that a new impulse wave is in development is for INTC stock to follow though by closing above $38.00.
The following stock chart illustrates the bullish price action that supported an advance, and the level of resistance at $38.00 that Intel stock needs to overcome.
Chart courtesy of StockCharts.com
The Intel stock chart above illustrates the uptrend line and the indicators that supported the advance that was instrumental in completing the consolidation pattern.
This uptrend line is created connecting the valleys on the INTC stock chart, and it has acted as a level of support since this advance began in mid-2015. As long as INTC stock remains above this trend line, bullish price action and higher prices are set to continue.
A golden cross was generated in July 2016 and this indicator is used by traders to confirm that a bull market is in development. It is created when the 50-day moving average crosses above the 200-day moving average. This indicator added further fuel to the bullish advance in Intel stock and was instrumental in setting up the breakout that completed the consolidation pattern.
The surge in price that followed the consolidation pattern peaked at $38.00, and INTC stock is currently attempting to break above this level of resistance.
The following Intel stock chart illustrates the price pattern that suggests a break above resistance at $38.00 is probable.
Chart courtesy of StockCharts.com
The INTC stock chart above exhibits similar healthy bullish price action, but on a smaller scale.
This price action suggests that an advancing impulse wave is set to develop with a price objective of $40.00. This price objective is based on the theory surrounding impulse waves that are separated by a consolidation wave. This theory suggests that these impulse waves have a tendency to mirror each other in terms of length. This creates an objective that is above the $38.00 level that is required to confirm that a much larger impulse wave is set to develop.
At this current juncture, Intel stock is backtesting the consolidation wave from above, and in order for this pattern remain intact, INTC stock needs to remain above this wave, and not trade back below it.
Bottom Line on Intel Stock
The price action on the chart remains bullish on multiple time frames, and this supports the notion that a new impulse wave is set to develop that can send INTC stock surging towards much higher prices.
