Chipmaker Intel Corp. ( INTC) is trading lower Thursday on supply concerns, so the stock warrants another review of the charts.
In our last review of INTC on Dec. 8 we wrote that "The charts of INTC are mixed. Yes the spin off of Mobileye could yield the company billions but the charts are not (yet) strong enough to anticipate a sustained advance."
Let's check the charts again.
In this daily bar chart of INTC, below, we can see that the shares managed to firm up a bit after our Dec. 8 review but the rally fizzled out around the declining 200-day moving average line. INTC pulled back to trade under the 50-day moving average line again.
Trading volume remained active in January but the On-Balance-Volume (OBV) line rolled over and weakened, telling us that sellers were more aggressive. The Moving Average Convergence Divergence (MACD) oscillator crossed to the downside and is just barely above the zero line.
In the weekly Japanese candlestick chart of INTC, below, we can see that prices could not sustain gains above the declining 40-week moving average line. The latest candle pattern could be a bottom reversal pattern but it needs bullish confirmation this week.
The weekly OBV line is turning down while the MACD oscillator is still bearish.
In this daily Point and Figure chart of INTC, below, we can see a potential downside price target in the $45-$44 area.
In this weekly Point and Figure chart of INTC, below, we can see an upside price target around $65 but a trade at $48.06 is likely to weaken the picture.
Bottom-line strategy: INTC looks weak and barring an oversold bounce we are likely to see the stock break $48 and head down to the $44 area in the weeks ahead.
