Semiconductor giant Intel Corporation (INTC) reports earnings in a trading range between my monthly value level of $45.89 and my annual pivot at $49.60. A positive reaction to earnings released after the close on Jan. 24 will result in a positive weekly chart targeting my quarterly risky level at $49.60.
Intel stock closed Wednesday, Jan. 23, at $47.94, up 2.2% year to date and up 14% from its 2018 low of $42.04 set on Feb. 9, 2018. The shares are also in correction territory at 16.8% below the 2018 high of $57.60 set on June 4, 2018. The stock is reasonably priced with a P/E ratio of 10.97 and a dividend yield of 2.49% according to Macrotrends.
Intel has always been a key benchmark stock. The company makes computer chips for integrated digital platforms for the computing and communications industries. The stock is a component of the Dow Jones Industrial Average, the S&P 500 and Nasdaq Composite, making it an important benchmark. Intel is one of the old-time tech stocks that lags its tech-bubble peak, which was $75.81 set in August 2000.
Analysts expect Intel to disclose earnings per share of $1.22 to $1.26 when the company reports results for the fourth quarter after the closing bell on Thursday, Jan. 24. The chip giant focuses on data centers services for server, networking and storage applications, as well as applications in cloud computing. Intel also makes computer chips for self-driving cars, artificial intelligence and the Internet of Things. Continued stability in the personal computer market will be a wild card.
The daily chart for Intel
The daily chart shows that Intel has been below a "death cross" since Sept. 11, 2018, when the 50-day simple moving average declined below the 200-day simple moving average to indicate that lower prices would follow. When this signal is in play, investors should reduce holdings on strength to the stock's 200-day simple moving average, which was doable at $49.62 on Oct. 3 and at $49.87 on Dec. 3.
The stock traded as low as $43.51 on Dec. 26 and then rallied with the market. The 2018 close of $46.93 was input to my proprietary analytics, which resulted in the new monthly, quarterly, semiannual and annual levels that are shown as horizontal lines on the chart. My monthly and semiannual value levels are $45.89 and $43.13, respectively, with annual and quarterly risky levels at $49.60 and $51.95, respectively.
The weekly chart for Intel
The weekly chart for Intel will end the week positive if the stock ends the week above its five-week modified moving average of $47.74. The stock is well above its 200-week simple moving average, or "reversion to the mean," at $38.54. The last time this average was tested was during the week of Feb. 12, 2016, when the average was $27.76. The 12 x 3 x 3 weekly slow stochastic reading is projected to end the week rising to 57.21, up from 63.23 on Jan. 18.
Given these charts and analysis, investors should buy weakness to my monthly and semiannual value levels at $45.89 and $43.03, respectively, and reduce holdings on strength to my annual and quarterly risky levels at $49.60 and $51.95, respectively.
Disclosure: The author has no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.