Intel (INTC) Surges 5.62% on Golden Cross and Overbought RSI Amid 10.32% Three-Day Rally

Intel (INTC) Technical Analysis

Intel (INTC) surged 5.62% in the most recent session, extending its three-day rally to a 10.32% gain. This sharp upward movement suggests strong short-term momentum, warranting a multi-faceted technical analysis to assess trend strength, potential reversals, and confluence of indicators.

Candlestick Theory

Recent price action forms a bullish continuation pattern, with three consecutive higher highs and closes above key resistance levels. A critical support zone emerges around $19.31–$19.95, defined by prior consolidation and failed pullbacks. Resistance is now anchored at $21.60–$22.63, where previous supply clusters and Fibonacci retracement levels (61.8% at $20.50, 78.6% at $21.00) align. A breakout above $22.63 could target $23.40–$24.20, while a breakdown below $19.95 may trigger a retest of $19.31.

Moving Average Theory

Short-term momentum is confirmed by the 50-day moving average (50DMA) crossing above the 200-day moving average (200DMA), forming a golden cross. The 50DMA currently resides at ~$20.50, while the 200DMA is at ~$19.80, with the 100-day moving average (100DMA) at ~$20.00. Price action above all three averages indicates a bullish bias. However, the 50DMA’s rapid ascent suggests acceleration, which could precede overbought conditions. A sustained close below the 50DMA would invalidate the uptrend.

MACD & KDJ Indicators

The MACD histogram has expanded positively, with the MACD line at ~$0.80 above the signal line, reinforcing momentum. The KDJ oscillator shows K at 85 and D at 78, signaling overbought territory. Divergence between K and price—where K fails to reach new highs while the stock does—may hint at weakening momentum, though this is common in strong trends. A drop below 50 in the KDJ would suggest a potential pullback.

Bollinger Bands

Volatility has spiked, with the bands widening from a prior contraction (August 4–8). Price is currently near the upper band at $21.81, indicating extended bullish pressure. A breakout above the upper band could extend the trend, while a retest of the lower band (~$19.95) may trigger a bounce. The 20-period Bollinger Band width at 1.86 suggests elevated volatility, consistent with the recent surge.

Volume-Price Relationship

Trading volume has surged during the rally, with the three-day average volume at ~$134M, up from ~$100M in July. This confirms strong buying interest. However, volume has not yet reached prior breakout levels (e.g., April 9, 2025), suggesting caution. A sustained volume spike above $150M on a breakout would add conviction, while declining volume during rallies may signal exhaustion.

Relative Strength Index (RSI)

The 14-period RSI stands at 72, indicating overbought conditions. While this is not uncommon in strong trends, a failure to break above 75 could signal short-term resistance. A drop below 50 would suggest a correction, with support at 30–40 potentially triggering a reversal. The RSI’s divergence from price (rising RSI with flattening price) may foreshadow a pullback.

Fibonacci Retracement

Key Fibonacci levels align with recent price action. The 61.8% retracement at $20.50 and 78.6% at $21.00 have been strong support/resistance areas. A break above $22.63 (100% extension) would target $23.40–$24.20, while a retest of $19.31 (38.2% retracement) may find buyers.

Backtest Hypothesis

The backtest of a strategy buying INTC when RSI dips below 30 and selling above 70 revealed significant underperformance, with a -6.78% CAGR and -65.84% excess return. This aligns with the current analysis, where RSI remains overbought despite the stock’s upward trajectory, suggesting the indicator’s traditional thresholds may be unreliable in strong trends. The 0.00% maximum drawdown (likely a data anomaly) further highlights the strategy’s inadequacy. A refined approach incorporating volume confirmation and moving average alignment—rather than RSI alone—may improve outcomes, leveraging confluence between momentum and trend indicators.