Intel Plunges 6.34% As Bearish Engulfing Pattern Erodes Key $20 Support

Intel (INTC) declined 6.34% in the latest session, closing at $20.68 on elevated volume of 146.3 million shares, forming a long red candle following an erratic price swing near the $21-22 range. This sharp move concludes a volatile period for the stock.
Candlestick Theory
Recent price action reveals heightened volatility. The June 10th session saw a strong 7.81% advance to $22.08, forming a long green candle, suggesting bullish momentum. However, this optimism was abruptly reversed the next day with the long red candle closing near the session low of $20.38. This forms a potential bearish engulfing pattern near the $22 psychological resistance level. Earlier, $20 acted as consistent support in early June, while $22-22.44 presents a clear resistance barrier confirmed by multiple rejection wicks. The latest price breakdown significantly weakens the $20.30-$20.50 support zone established over the prior week.
Moving Average Theory
The downtrend remains firmly entrenched across all major moving average periods. The 50-day SMA (approx. $22.80), 100-day SMA (approx. $21.50), and 200-day SMA (approx. $23.20) all slope downwards decisively. Crucially, the current price sits well below all three key averages, confirming the primary bearish trend. Recent attempts to challenge the declining 50-day MA failed near $22.50, reinforcing its role as dynamic resistance. The alignment of these averages above price signals strong ongoing downward pressure.
MACD & KDJ Indicators
The MACD histogram is entrenched in negative territory with the signal line above the MACD line, sustaining a strong bearish signal. While a minor bullish crossover attempt occurred in early June, momentum swiftly faded. The KDJ oscillator reflects recent turbulence. After reaching overbought territory above 80 following the June 10th surge, the KDJ plunged sharply, with the K-line falling below the D-line, issuing a fresh bearish crossover signal near 60. This sharp reversal indicates rapid deterioration in short-term momentum, supporting the view of fading bullish strength. The %J line exhibits high volatility.
Bollinger Bands
Bollinger Bands widened significantly during the June volatility surge, indicating increased volatility. Price breached the upper band on June 10th during its strong rally, an early warning sign of potential exhaustion. The subsequent sharp reversal has now pushed price towards the lower band near $20. The breach of the 20-period moving average midline support during the decline further adds to the bearish outlook. Recent contraction prior to the breakout has now been replaced by directional movement confirming the prior volatility surge.
Volume-Price Relationship
Recent volume patterns offer critical context. The sharp June 10th 7.81% rally to $22.08 occurred on high volume (171.5 million shares), suggesting strong initial buying conviction. However, the subsequent 6.34% drop on June 11th also occurred on very high volume (146.3 million shares). Selling volume matching or exceeding the prior day's buying volume signals intense distribution and conviction behind the reversal. This bearish volume signature significantly undermines the prior upward move's sustainability. Historically, breakdowns like the one witnessed on April 25th and the steep August 2nd decline were also accompanied by massive volume spikes, indicating capitulation.
Relative Strength Index (RSI)
The 14-day RSI dipped to approximately 32.8 following the recent sharp decline. While technically approaching the oversold threshold (<30), it remains above it, negating a clear oversold signal at this point. More importantly, the RSI failed to reach overbought (>70) levels during the June 10th rally, creating a bearish divergence where price made a higher high while RSI made a lower high. This divergence signaled underlying weakness before the sharp pullback and suggests the bearish trend retains momentum. Vigilance is warranted near 30, but oversold conditions have not been definitively established yet.
Fibonacci Retracement
Applying Fibonacci retracement levels to the major downward impulse from the July 2024 high of approximately $36.30 to the April 2025 low near $18.25 provides key technical levels. The recent recovery stalled critically at the 38.2% retracement level near $25.50 in early June, which aligns with the cluster of moving averages, creating strong technical resistance. Further overhead resistance exists near the 50% retracement level (~$27.30). Key support levels derived from the current pullback within the larger downtrend are found at the 23.6% retracement ($20.60, slightly breached) and the psychologically significant $20 level. A decisive break below $20 opens the door to a potential retest of the yearly low near $18.25 (the 0% Fibonacci level).
Confluence and Divergence
Strong bearish confluence exists around the $22 level: historical price rejections, recent failed resistance tests, Fibonacci levels, proximity to key moving averages, and the bearish engulfing candlestick pattern. The bearish RSI divergence prior to the June 11th collapse adds weight. A notable divergence lies between the high-volume breakout failure and the RSI hovering just above oversold territory; the price decline has been steeper than the RSI decline in the near term, potentially signaling exhaustion amidst the prevailing downtrend, but not yet confirmation of a reversal. The overarching technical picture remains heavily bearish, though short-term indicators are probing near-term support levels.