Intel stock has fallen 64% from the high, joining AMD and Nvidia in an infamous run. Let’s look for potential support.
The semiconductor stocks have been on a horrendous run.
Intel (INTC) – Get Intel Corporation Report, Advanced Micro Devices (AMD) – Get Advanced Micro Devices Inc. Report and Nvidia (NVDA) – Get NVIDIA Corporation Report have all felt the pinch, with each stock down more than 60% from their all-time highs.
Intel often gets overlooked for the higher-growth stocks like AMD and Nvidia. Those two had vastly outperformed Intel in the prior bull market.
Now, Intel is currently down 63.5% from its all-time high, while AMD and Nvidia are down 64.4% and 65.3%, respectively. They’re so different, but they’re now all in the same boat.
Intel is trading at 11 times earnings and paying out a near-6% dividend yield, and the stock is getting hard to ignore. With a payout ratio of just 36%, the dividend should be safe — even if the company is looking at job cuts.
Time to review the chart.
When to Buy Intel Stock?
Monthly chart of Intel stock.
Chart courtesy of TrendSpider.com
Intel stock has had some very strong support in the $12 to $15 range. But to get there would require a 50% decline from current levels and would imply an 80%-plus decline from the all-time high.
Absent some serious global destruction, I do not see that scenario unfolding.
Instead, I want to see how Intel handles the $24 to $25 area. In that zone, we have the 78.6% retracement, measured from the all-time high down to the 2009 bear-market low.
In the prior bear market Intel pulled back about 56% from its 2007 high down to the 2009 low. From its high following the dot-com bust (in 2004) down to the 2009 low, the shares fell about 65%.
We’re near that down-65% threshold now — although it doesn’t mean we’ll bottom there.
If Intel stock can find its footing near $24 to $25, long-term investors may consider initiating a position in this area.
I’m not sure where the low is; it could be around $24 to $25, down at $20 or even below that. The point is that no one knows where the low is, and at some point this asset becomes too cheap to ignore.
On the upside, the bulls need to see Intel stock reclaim the $27.50 area. This has been a key pivot for almost two decades.
Above that figure opens the door back to the 200-month moving average near $32.50. Above that puts the declining 10-month moving average in play, followed by $38.
At this point, it seems like there is a bigger chance of a 50% upside move than a 50% decline from the recent low.
