Intel Corporation (INTC) shares rose nearly 4% during Wednesday's session after Qualcomm Incorporated (QCOM) and Apple Inc. (AAPL) dropped their litigation and entered into a six-year licensing agreement. The move prompted Intel to abandon its efforts to launch 5G modem products into the smartphone space and instead focus on 4G and 5G modems for PCs, Internet of Things and other data-centric devices.

Analysts supported the move to abandon 5G smartphone modems given the low margins and lack of a clear pathway to profitability. KeyBanc analyst Weston Twigg doesn't expect the move to affect Intel's 2019 outlook, although it could actually improve the company's longer-term revenue and margin profile. Other analysts echoed these sentiments and helped the stock move sharply higher during Wednesday's session.

Since the beginning of the year, Intel shares have risen sharply higher, despite strong competition from Advanced Micro Devices, Inc. (AMD) and others. Intensifying demand from cloud vendors and streaming services has created strong demand for its chips, while concerns about server market share losses may be overblown, according to some analysts.

Technical chart showing the share price performance of Intel Corporation (INTC) 

From a technical standpoint, the stock broke out from a rising wedge pattern and R2 resistance at $56.75 to fresh highs. The relative strength index (RSI) moved into overbought levels with a reading of 76.67, but the moving average convergence divergence (MACD) accelerated its bullish upswing. These indicators suggest that the stock could see some near-term consolidation, but the overall trend remains higher.

Traders should watch for some consolidation above R2 and trendline support at $56.75 over the coming sessions. From there, the stock could continue to soar into new highs above $60.00 over the coming weeks and months. If the stock breaks down below these key support levels, traders could see a move lower toward R1 support at $55.23 or the pivot point and 50-day moving average near $53.39, although that scenario seems less likely given the stock's recent strength.

The author holds no position in the stock(s) mentioned except through passively managed index funds.