Money Markets

Intel Corporation (INTC): Scrutinizing the Chart

During the recent trading sessions stock of Intel Corporation (NASDAQ:INTC) was gathering the crowd in the stock market. Many analysts use price trends and patterns to predict future performance, and we can glean some important insights about INTC by examining the chart.

How has the stock performed recently?

Intel Corporation (NASDAQ:INTC) has been trading in a bullish manner, based on the relative positions of the stock’s 20 and 200 day moving averages. In the last month, the price of INTC has increased +3.68%. Shares are now up over the past year, outperforming the broad market by -100% and outperformed a peer group of similar companies by 844%. After the latest session, which saw the stock close at a price of $44.83, INTC sits below its 52-week high.

Momentum indicators

Of course, these surface-level price movements don’t tell us much about the direction that INTC may be headed in the future. If we want to get a sense of INTC’s future performance, we have to look at the speed and size of these price movements. Using what are known as momentum indicators, we can use the stock’s price momentum to get a sense of whether the stock is in the midst of, or nearing the end of, a current trend. Two such indicators are the RSI (Relative Strength Index) and the Stochastic %k Oscillator, which fluctuate on a scale of 0 to 100. A reading above 70 indicates that a stock is overvalued, and a reading below 30 implies that it is undervalued. The 20-day RSI for INTC is 48.61%, which suggests that the stock is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. The 20-day Stochastic %k measure, which sits at 18.97%, tells a different story, and suggests that INTC currently trades in oversold territory.

What do the trading volumes reveal?

Volume patterns are useful for gauging the level of conviction behind price changes, and can be used to make predictions about future price movements. A sudden increase in a stock’s activity can be a sign that investors are trading in anticipation of a catalyst, or that investors feel very strongly in one way or the other about the future direction of a stock. Intel Corporation (INTC) average trading volume of 38,595,816 during the past month is 43.88% above its average volume over the past year, indicating that investors have been more active than usual in the stock in recent times.

What do the analysts think?

INTC is currently undervalued by -13.56% relative to the average 1-year price target of $51.86 taken from a group of Wall Street Analysts. The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 2.30, which implies that analysts are generally neutral in their outlook for INTC over the next year.

How risky is the stock?

Absolute price performance isn’t the only thing analysts consider when predicting future performance: volatility matters as well. Beta, which measures the stock’s volatility relative to the overall market, is a simple but effective metric for assessing risk.

Intel Corporation (NASDAQ:INTC) has a beta of 1.11, compared to a beta of 1 for the market, which implies that the stock’s price movements are more extreme than the market as a whole. INTC therefore has an above average level of market risk. During the past couple of weeks, INTC average daily volatility was 56.50%, which is -24.75 percentage points higher than the average volatility over the past 100 days.

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