The semiconductor concern is flashing a historically bullish combination
This commentary first appeared on Forbes Great Speculations, where Schaeffer's Investment Research is a regular contributor.
Semiconductor concern Intel Corporation (NASDAQ:INTC) is underperforming on the charts, and now sits 31.3% lower in 2022. A late-July bear gap saw the shares breech the 30-day moving average, and touch a roughly five-year low of $34.40 on Aug. 9. However, INTC could soon stage a bounce, as it’s now flashing a historically bullish signal.
Specifically, Intel stock's latest rut comes amid historically low implied volatility (IV), which has been a bullish combination for the security in the past. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there have been four other times over the past five years when the stock was trading within 2% of its 52-week high, while its Schaeffer's Volatility Index (SVI) was in the 20th percentile of its annual range or lower.
This is now the case with INTC's SVI of 28%, which stands in the 37th percentile of its 12-month range. According to White’s data, the security averaged a one-month gain of 9.52% after each of these signals. With the shares currently trading around $35.46, a similar pop would put the equity around $38.84 – back above its aforementioned bear gap.
It's also worth noting that Intel stock’s 14-day Relative Strength Index (RSI) of 29.5 sits in “oversold” territory. This means the shares are overdue for a short-term bounce.
An unwinding of pessimism amongst the brokerage bunch could also help INTC move higher on the charts. Of the 21 analysts in coverage, 19 carry a “hold” or worse rating on the security, while just two say “buy” or better.