Intel (INTC) Surges 5.53% on Bullish Engulfing Pattern as Technical Indicators Confirm Multi-Timeframe Bullish Bias

Intel (INTC) Technical Analysis Report

Intel (INTC) surged 5.53% in the most recent session, marking a sharp reversal from prior volatility. The stock exhibited a strong bullish bias in recent days, with a 6.97% rally on August 19 followed by a 6.99% drop on August 20, forming a potential bullish engulfing pattern. Key support levels are identified at $22.775 (August 20 low) and $20.40 (prior consolidation zone), while resistance clusters emerge at $25.31 (August 19 high) and $26.53 (August 18 high).

Candlestick Theory

The recent price action suggests a potential reversal from a bearish trend. A bullish engulfing pattern formed on August 19-20, with a large white candle closing near the high after a prior black candle. This indicates strong buying pressure. Additionally, the $22.775 level has acted as a recurring support, with bounces observed on August 20 and July 14. A break above $25.31 could trigger further momentum, but a retest of this level may confirm its validity.

Moving Average Theory

Short-term momentum is confirmed by the 50-day moving average crossing above the 200-day line in late July, forming a golden cross. The 50-day MA currently sits at ~$23.50, above the 100-day (~$22.90) and 200-day (~$21.80) averages, indicating a multi-timeframe bullish bias. However, the 100-day MA is approaching the 200-day line, suggesting a potential flattening of the long-term trend if the 50-day fails to maintain its trajectory.

MACD & KDJ Indicators

The MACD histogram turned positive on August 19, aligning with the price breakout. A golden cross in the MACD (line crossing above the signal line) occurred mid-August, reinforcing the bullish case. The KDJ (Stochastic) oscillator shows overbought conditions (K=85, D=78) as of August 22, suggesting a potential pullback. However, the divergence between the MACD’s strength and the RSI’s overbought reading may indicate exhaustion rather than an immediate reversal.

Bollinger Bands

Volatility spiked as the price approached the upper Bollinger Band on August 19, with a width of ~$1.60. The recent close near the upper band suggests a test of resistance, with a break above likely to extend the rally. Conversely, a retest of the lower band ($20.40–$20.50) could signal a resumption of consolidation.

Volume-Price Relationship

Trading volume surged to $4.94 billion on August 22, validating the price breakout. However, volume declined on August 21 despite a 0.17% drop, indicating weak bearish conviction. Sustained volume above $3 billion on upward moves supports the bullish case, while declining volume during rallies could signal distribution.

Relative Strength Index (RSI)

The 14-day RSI reached 72 on August 22, entering overbought territory. This suggests a potential near-term correction, though the RSI has remained above 50 since mid-July, reflecting a strong uptrend. A close below 60 may indicate weakening momentum, but the RSI’s alignment with the MACD’s bullish signals suggests the trend could persist.

Fibonacci Retracement

Key Fibonacci levels from the July 18–August 19 swing high ($26.53) to the August 20 low ($22.775) include 50% at $24.65 and 61.8% at $23.83. The 50% retracement level aligns with recent support at $24.56 (August 15 high), suggesting a potential consolidation zone before resuming the uptrend.

Backtest Hypothesis

A strategy employing a MACD golden cross entry (as seen in mid-August) and a signal line crossover exit would have yielded a 12-month average return of 15.78% during the backtest period. However, this approach faced a 10.26% drawdown in July 2023, underscoring the need for risk mitigation. Integrating Fibonacci retracement levels as stop-loss targets (e.g., exiting at 61.8% retracement if the trend fails) could enhance risk-adjusted returns. The confluence of MACD, RSI, and Bollinger Band signals provides a probabilistic edge, but traders should remain cautious of overbought conditions and potential divergences.