Intel Stock Moves Lower After Apple Drops Contract
Despite the seemingly bearish news, Stifel analysts reminded investors that Apple represents only 4% of Intel's revenue and less than 1% of its profits. The research firm maintained its Buy rating on Intel stock and reaffirmed its $53.00 price target, which represents a 7.5% premium to the current market price. In addition, the analyst noted that Apple held just 7.3% of the traditional PC market during the fourth quarter. (See also: Analysts Say Reaction to Apple Ditching Intel Is Overblown.)
From a technical standpoint, Intel stock broke down from a rising wedge pattern in mid-March before falling below the pivot point on Monday. The relative strength index (RSI) appears neutral at 47.88, but the moving average convergence divergence (MACD) remains in a bearish downtrend after crossing over in mid-March. These indicators suggest that the stock could see more downside before resuming its uptrend.
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Traders should watch for a breakdown from the 50-day moving average and S1 support levels at around $48.10, which could lead to a move down to S2 support at around $44.12. If the stock rebounds, traders should watch for a retest of the pivot point at $50.94 or upper trendline resistance near R1 resistance at $54.92. However, the stock will likely continue to see bearish pressure for the time being given the Apple news. (For more, see: 3 Stocks That Will Win the High-Speed Data Wars.)
Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.