Intel's 1.90% Drop Sparks Bearish Signals as RSI Hits 28.3 and Moving Averages Confirm Downtrend

Candlestick Theory

Intel’s recent price action reveals a bearish bias, with two consecutive days of declines and a 1.90% drop over the last two sessions. The candlestick patterns suggest weakening momentum, as the recent low on 2025-10-06 ($36.43) forms a potential support level. A bullish reversal could emerge if the price tests this support and forms a hammer or a morning star pattern. Conversely, a breakdown below this level may trigger further declines toward the next key support near $33.55 (low on 2025-09-30). Resistance remains weak at $37.57 (high on 2025-10-02), where prior failed rallies suggest limited buying pressure.

Moving Average Theory

Short-term moving averages (50-day and 100-day) are below the 200-day MA, confirming a bearish trend. The 50-day MA currently sits at $34.25, while the 100-day MA is at $33.50, indicating a flattening of the downtrend. If the price crosses above the 50-day MA on sustained volume, it may signal a short-term rebound. However, the 200-day MA at $32.00 remains a critical barrier; a close below this level would reinforce a long-term bearish bias.

MACD & KDJ Indicators

The MACD histogram has been contracting, suggesting waning bearish momentum, but the MACD line remains below the signal line, maintaining a bearish bias. The KDJ indicator shows the K line at 22.3 and the D line at 28.7, with the J line dipping into oversold territory. While this hints at potential near-term oversold conditions, a divergence between the KDJ and price action (e.g., K line failing to rise despite higher lows) would strengthen the case for a reversal.

Bollinger Bands

Volatility has expanded recently, with the price hovering near the lower band of the Bollinger Bands (currently at $35.00). This suggests oversold conditions, but the bands’ width indicates elevated volatility. A breakout above the upper band ($38.00) could signal a short-term rally, while a breakdown below the lower band may confirm a deeper decline. The midpoint of the bands ($36.50) could act as a dynamic support/resistance level.

Volume-Price Relationship

Volume has surged on recent declines, confirming the bearish momentum. For instance, the session on 2025-09-18 saw a 22.77% drop on record volume of 523.9 million shares, validating the selloff. However, the recent two-day decline (0.65% and 1.26%) occurred on moderate volume, suggesting weakening bearish conviction. A surge in volume on a rebound could indicate short-covering or renewed buying interest.

Relative Strength Index (RSI)

The RSI has dipped to 28.3, entering oversold territory (<30), which historically suggests a potential rebound. However, in a strong downtrend, the RSI can remain oversold for extended periods. A divergence between RSI and price action (e.g., RSI rising while price continues to fall) would strengthen the case for a reversal. Traders should await a closing above the 30 threshold before considering a bullish bias.

Fibonacci Retracement

Applying Fibonacci levels to the recent downtrend from $38.68 (2025-10-06 high) to $36.43 (2025-10-06 low) reveals key retracement levels at 38.2% ($37.30) and 61.8% ($36.80). A rebound to these levels could attract buyers, but a breakdown below the 78.6% retracement ($36.10) may target the next support at $33.55.

Backtest Hypothesis

The proposed strategy of buying Intel when RSI falls below 30 and holding until the next oversold signal from 2022 to 2025 yielded a -48.33% return, significantly underperforming the benchmark (S&P 500, +48.89%). This poor performance aligns with the historical RSI data, which showed no oversold signals (<30) during the backtest period. The strategy’s failure highlights the risks of relying solely on RSI in a prolonged bear market. Confluence with other indicators (e.g., Bollinger Bands, KDJ) could improve reliability, but the current environment suggests caution.