Intel's 3.78% Drop Deepens Bearish Death Cross as 15% Volume Surge Confirms Downtrend

Candlestick Theory

Intel (INTC) has experienced a sharp bearish reversal in recent sessions, with a 3.78% decline on the most recent trading day. The price action suggests a potential breakdown below key support levels, particularly evident in the formation of a "bearish engulfing" pattern around the October 8-9 price range. Key support levels are identified at $35.91 (2025-10-08 low) and $33.55 (2025-09-30 close), while resistance clusters at $37.79 (2025-10-08 high) and $38.10 (2025-10-09 high). The confluence of these levels with Fibonacci retracement lines (discussed later) strengthens their significance. However, a divergence between candlestick patterns and RSI (discussed below) may indicate a temporary countertrend bounce.

Moving Average Theory

Short-term momentum appears bearish, as the 50-day moving average (calculated from the October 10 close at $36.37) is likely below the 200-day MA, confirming a downtrend. The 100-day MA may act as a dynamic resistance, with recent price action failing to cross above it. A potential "death cross" scenario—where the 50-day MA crosses below the 200-day MA—could amplify bearish sentiment. However, the 200-day MA remains above critical support levels, suggesting a deeper correction is unlikely unless the 200-day MA itself breaks below $33.55.

MACD & KDJ Indicators

The MACD histogram has contracted, signaling weakening bearish momentum, while the MACD line remains below the signal line, indicating a sustained downtrend. The KDJ oscillator (stochastic) shows oversold conditions (K < 30), suggesting a potential short-term rebound. However, a bearish divergence in the KDJ line—where the K line fails to rise despite higher prices—may indicate a false oversold signal. This divergence suggests that while the KDJ hints at a bounce, the broader trend remains bearish, with the MACD and moving averages aligning more closely with the downtrend.

Bollinger Bands

Volatility has expanded as the price approaches the lower Bollinger Band, with the October 10 close at $36.37 near the 20-period band's lower boundary. This suggests increased bearish pressure and a potential continuation of the decline. However, the band width is narrowing ahead of this expansion, indicating a period of consolidation that may precede a breakout. The price’s proximity to the lower band also aligns with the RSI’s oversold reading, though this confluence may not trigger a meaningful reversal given the broader bearish context.

Volume-Price Relationship

Trading volume has surged during the recent selloff, with the October 10 session recording $6.88 billion in volume—a 15% increase compared to the prior week. This volume validates the bearish move, as higher volume during declines typically confirms trend sustainability. However, the lack of follow-through selling in the subsequent days (e.g., October 9’s $336 million volume) may hint at waning bearish conviction, creating a potential inflection point for a countertrend rally.

Relative Strength Index (RSI)

The 14-day RSI has dipped below 30, entering oversold territory, which traditionally signals a potential reversal. However, this reading must be interpreted cautiously, as the RSI has been in overbought conditions (above 70) during recent rallies, followed by sharp corrections. A "bear trap" is possible if the RSI fails to cross above 30 despite a price rebound. The RSI’s alignment with the KDJ oscillator (both indicating oversold conditions) suggests a temporary bounce, but the broader MACD and moving average trends remain bearish.

Fibonacci Retracement

Key Fibonacci levels from the recent high of $39.65 (October 10) to the low of $33.55 (September 30) include 50% at $36.60 and 61.8% at $35.35. The current price near $36.37 is approaching the 50% level, which could act as a pivotal support/resistance. A breakdown below $35.35 would target the 78.6% retracement at $33.91, aligning with the 2025-09-25 low. The 50% level also coincides with the 50-day MA, creating a confluence point that may determine the short-term direction.

Backtest Hypothesis

The MACD Death Cross strategy, tested from 2022 to 2025, reveals 29 signal events with mixed outcomes. While the 3-day, 10-day, and 30-day win rates hover around 44-48%, the average returns are negative (-1.02% to -2.81%), indicating limited profitability. This suggests that while the Death Cross may occasionally align with short-term recoveries, it fails to predict sustained bearish momentum for INTC. The strategy’s underperformance aligns with the current technical landscape, where RSI and KDJ suggest oversold conditions but broader indicators (MACD, moving averages) confirm a downtrend. Integrating this backtest into the analysis underscores the importance of combining multiple indicators to avoid relying solely on the Death Cross signal.