Intel Shares Plunge 6.99% as Bearish Engulfing Pattern Erases Prior Rally

Intel (INTC) shares declined 6.99% during the most recent trading session on 2025-08-20, closing at $23.54 after trading between $23.33 and $24.93, accompanied by 160.3 million shares traded. This substantial pullback followed a 6.97% surge the previous day, reflecting heightened volatility and potential exhaustion of the recent upward momentum.
Candlestick Theory
The price action exhibits significant reversal signals, particularly the bearish engulfing pattern formed on 2025-08-20 (6.99% down day) completely consuming the prior session’s 6.97% advance. This suggests strong selling pressure near the $26.50 resistance level. Key support emerges at $23.33 (recent low), with a breach potentially targeting the $21.00–$21.50 consolidation zone from July. Resistance remains firm between $26.50 (August high) and the $27.39 yearly peak.
Moving Average Theory
The 50-day moving average (approx. $22.50) crossed above the 100-day (approx. $22.00) and 200-day (approx. $21.30) in mid-July, confirming a bullish long-term structure. However, the recent reversal has pushed the price below the 50-day MA for the first time in two months. The 200-day MA continues to slope upward, providing a key long-term support baseline. The loss of the 50-day MA may signal near-term trend deterioration.
MACD & KDJ Indicators
The MACD (12,26,9) crossed below its signal line on 2025-08-20, entering negative territory for the first time since June – a bearish momentum shift. Simultaneously, the KDJ oscillator (9,3,3) shows the %K line plunging from overbought (>80) to near 30, suggesting rapid loss of upward momentum. While not yet oversold, the KDJ crossover points to increasing downside pressure. Both indicators align in signaling weakening bullish control.
Bollinger Bands
Bollinger Bands (20-day, 2σ) expanded sharply during the late-July to mid-August rally, reflecting elevated volatility. The price recently rejected the upper band near $26.53, followed by a decisive close below the 20-day moving average (mid-band) on 2025-08-20. This contraction phase suggests declining volatility, often preceding directional resolution. The current position near the lower band ($22.80) may offer temporary support.
Volume-Price Relationship
Volume surged to 297.7 million shares during the 2025-08-19 rally, validating bullish momentum initially. However, the subsequent 6.99% sell-off occurred on 46% lower volume, indicating limited conviction behind the decline and suggesting potential exhaustion rather than aggressive new short positioning. Sustained closes below $23.30 on higher volume would confirm bearish control.
Relative Strength Index (RSI)
The 14-day RSI peaked near 75 on 2025-08-19 – notably below its June high of 82 – forming a bearish divergence against the price’s higher high. The RSI then collapsed to 35 after the sell-off, exiting overbought territory but remaining above oversold levels. This warns of further downside potential before reaching oversold conditions, though divergence signals waning momentum strength.
Fibonacci Retracement
Applying Fibonacci levels to the upswing from the 2025-04-08 low ($18.13) to the 2025-08-19 high ($26.53), key retracement supports emerge: 23.6% at $24.55 (breached), 38.2% at $23.20 (tested intraday), and 50% at $22.33. The 61.8% level at $21.45 aligns with the 200-day MA and the July consolidation base. Current price action is testing the 38.2% level – a decisive break below this zone would increase odds of a deeper correction.
Confluence and Divergence
Confluence exists between the 38.2% Fibonacci support ($23.20), the 100-day moving average, and the July price consolidation – reinforcing critical significance. Notable bearish divergences include RSI momentum weakening as prices peaked in August and KDJ’s failure to reach prior highs despite higher price highs. Bullish volume divergence appears during the sell-off. The breach of the 50-day MA and MACD crossover strengthen bearish near-term signals, but the 200-day MA’s upward slope and volume characteristics suggest the primary uptrend remains intact absent a break below $21.45.