Intel like the majority of companies worldwide has seen a sharp decline in their share price due to COVID 19 however being in the technology sector has helped cushion the fall as the pandemic hasn’t disrupted business operations as much as other sectors. One big change that has occurred for intel is that they will no longer be supplying Apple with their processing chips, instead, Apple has decided to do in house ARM-based processing without Intel. We will take a closer look at how the stock is positioned for the future based on Technical analysis.
The Moving Average Convergence (MACD) is a trend momentum indicator that shows the relationship in this case between the 12 day and 26-day moving averages. It is commonly used as a buy or sell signal when the two lines cross if the Signal 26 day line (Orange) crosses the 12-day MACD line (Blue), It indicates a Bearish Selling signal. This is because the shorter 12-day moving average has diverged from the long term moving average downward meaning a downside momentum is occurring. This is what has occurred in the above graph with Intel pointing towards a possible decrease in price.
Balance of Power
The Balance of power indicator is very simple when the line is above 0 it indicates that buyers have dominance over sellers and when it is below 0 it indicates that sellers have dominance over buyers. The indicator moves between 1 at the very highest and -1 at the very lowest the indicator tracks how strongly price trades to extreme high and low levels. The Reading Intel has is -.49 which strongly indicates sellers are dominating the buyers in the market pointing to the conclusion that Intel shares may move lower.
There is clearly a decrease in Volume highlighted by the vertical bars underneath the chart. Showing that trading activity among investors is decreasing which normally means that there is less interest among investors to buy. With a higher than average trading activity the volatility of Intel is likely to increase as well as a likely increase in the value of the underlying stock.
With all this said it is always important to remember to diversify your investments to ensure that you are less sustainable to market volatility and rapid market movements. Also if you are new to investing make sure you look into trading with a demo account to practice, more information on that can be found here.