Intel Stock Analysis: CEO Plans to Sell Assets and Cut Costs – Keep a Close Eye on These Levels
Intel (INTC) shares have been under the spotlight this week following reports that CEO Pat Gelsinger and other senior executives are gearing up to unveil plans that involve shedding assets and reducing capital expenditures in an effort to revitalize the company’s performance.
After a significant drop of over 26% in early August subsequent to the company’s quarterly results, Intel shares have shown signs of a potential double bottom formation, a chart pattern often indicative of a trend reversal towards the upside.
Investors are advised to keep a keen eye on key overhead chart levels in Intel shares, particularly at $25, $30, $32.25, and $37, which could play crucial roles in determining the stock’s future trajectory.
The recent surge of more than 9% in Intel’s stock price on Friday was prompted by reports from Bloomberg suggesting that the chipmaker is contemplating spinning off or selling its foundry business, a division that has been operating at a loss and is responsible for manufacturing chips for third-party customers. However, while the company is reportedly not currently planning to divest its contract manufacturing operation, discussions are underway regarding the potential sale of its Altera programmable chip unit.
Despite the positive momentum seen on Friday, Intel shares have experienced a significant decline of over 56% since the beginning of the year, with the downward trend intensifying following the disappointing second-quarter earnings report. In response to these challenges, Intel announced a suspension of its dividend payments and a 15% reduction in its workforce with the aim of generating $10 billion in savings.
Technical analysis of Intel’s chart indicates the presence of a double bottom pattern, which could signal a reversal in the company’s stock price trajectory. Investors are advised to closely monitor the stock’s performance this week for confirmation of a breakout and validation of the pattern.
In light of potential bullish movement in the stock, it is important for market participants to pay attention to specific overhead chart levels that are likely to attract significant interest. These levels include $25, $30, $32.25, and $37, each of which represents a critical point where the stock may encounter resistance or support based on historical price action.
At $25, investors who entered near recent lows may opt to take profits, while a move towards $30 could face resistance from a horizontal line connecting previous peaks and troughs in the stock. Further upside may see Intel shares reaching $32.25, where a trendline intersecting various swing lows could act as a barrier to continued price appreciation. If the stock manages to break through these levels, a potential rally towards $37 is possible, with the confluence of resistance from the downward sloping 200-day moving average and previous price peaks providing a significant obstacle.
In conclusion, the upcoming announcements from Intel’s management regarding asset sales and cost-cutting measures have the potential to significantly impact the company’s stock performance. Investors should closely monitor key chart levels and technical patterns to determine the future direction of Intel shares in the market.
As always, the information provided in this analysis is for informational purposes only and should not be considered as financial advice. It is important to conduct thorough research and consult with a financial advisor before making any investment decisions.
Sources:
– Reuters
– Bloomberg
– Investopedia
