Intel’s technical indicators
Previously, we learned that Intel (INTC) stock began to rise after bottoming out in October. The stock’s growth momentum began after the company reported strong guidance for the fourth quarter. However, we expect the stock’s growth momentum to slow in the first half of 2019 as competition creeps in.
Let’s take a look at investors’ sentiments toward Intel. Technical indicators try to find a regular pattern in a stock’s price movements and determine when that pattern is repeated to estimate its future movements.
One measure of technical analysis is the moving average, which takes the average of a stock’s prices over a certain period to estimate the direction in which its movement is skewed. When a stock’s short-term moving average is higher than its long-term moving average, it shows technical strength.
Intel’s current price is higher than its 50-day moving average and closer to its 200-day moving average, indicating recovery from technical weakness. However, rival Advanced Micro Devices (AMD) is trading below its 50-day and 200-day moving averages, as it’s still recovering from its fall in October, when it reported weak fourth-quarter earnings guidance. The case is similar with NVIDIA (NVDA).
The moving average shows that Intel stock has almost recovered. However, it remains to be seen whether the stock is set for growth in the near term, so it’s important to understand the magnitude of investors’ sentiments toward the stock.
The best way to understand investors’ sentiments is to look at a stock’s RSI (relative strength index), which is measured on a scale of 0–100, with less than 30 indicating oversold status and more than 70 indicating overbought status.
Intel’s RSI currently stands at 49.5, which means investors are neutral toward the stock. AMD has an RSI of 42.2. The two stocks could see significant changes as we move from 2018 to 2019. This transitional period is when most institutional investors make portfolio changes.
Overall, technical indicators show that Intel’s and AMD’s stock prices are likely to remain more or less stable in the coming few days.