Intel shares jumped 10% after Northland Securities upgraded the stock to Outperform with a $120 price target, while DigiTimes reported the chipmaker may raise CPU prices by as much as 10%. The stock cleared its 100-day moving average at $104.27, opening the door to further gains toward $107.57 and $112.05.
Intel shares surged 10% in trading, driven by improving analyst sentiment, potential pricing power and rising optimism around the company's foundry business. Northland Securities upgraded Intel to Outperform from Market Perform and set a $120 price target, with analyst Gus Richard citing improving execution in Intel's turnaround, tight supplies of server processors and the potential benefit from Intel's reported involvement with Tesla's Terafab semiconductor project.
If that relationship develops, it could give Intel Foundry, the unit that manufactures chips for outside customers, an important boost. Separately, DigiTimes reported that Intel may raise CPU prices by as much as 10%. If demand stays firm and processor supplies remain constrained, higher prices could help Intel improve margins and strengthen its financial and manufacturing position.
Buyers regained control last week
Intel shares fell below the 100-day moving average on August 18 and stayed below that level as the price declined to $85.14 on August 24. The first signs of a turnaround appeared last week: the price moved above its 100-hour moving average at $91.27 on Thursday, then extended above its 200-hour moving average at $94.72 on Friday.
Those moving average breaks shifted the short-term technical bias back toward the buyers. They did not guarantee further gains, but they built the foundation for today's sharp move higher.
The gap higher strengthens the bullish bias
Intel gapped higher today, with the low during the first hour of trading reaching $100.35, holding above the psychologically important $100 level. The price then moved above a swing level near $102.40 and the rising 100-day moving average at $104.27, remaining above that average for the past five trading hours. As long as the price stays above that level, the buyers are in firm control.
Next targets and risk levels
The next upside target sits at the August 13 swing high of $107.57. A sustained move above that level would open the door toward the 50% retracement of the decline from Intel's June all-time high, which comes in at $112.05. The price has not traded above those levels since July 9.
For buyers, the rising 100-day moving average at $104.27 is now the closest risk-defining level. A move back below it would signal today's enthusiasm is beginning to fade, with the next support near the former swing resistance at $102.40.
Source: investingLive
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