Intel (INTC) stock price surged more than 7% yesterday, making it the top performer in the S&P 500 index (US SPX 500 mini on FXOpen). The rally came on the back of a report in Barron’s stating that the US government is in talks to acquire a stake in Intel:

→ Intel declined to comment on Barron's report.
→ White House spokesperson Kush Desai stated: “Discussion about hypothetical deals should be regarded as speculation unless officially announced by the Administration.”

Meanwhile, Bloomberg reported that the Trump administration is negotiating with Intel over a potential US government stake in the company – a move aimed at boosting domestic manufacturing and supporting Intel’s plans to build a new facility in Ohio.

The prospect of state backing for the American chipmaker triggered a sharp bullish impulse yesterday, which could extend into today. In pre-market trading, INTC shares are hovering around $25 – their highest level since March.

Technical Analysis of INTC Shares

Previously, when analysing the INTC chart, we highlighted the significance of the $20 level, which appeared to act as strong support from major market participants. This may have reflected expectations that the government would not abandon a strategically important US company during challenging times – particularly in the context of technological rivalry with China.

For months, INTC shares had been in a downtrend (as shown by the 100- and 200-period moving averages). However, yesterday’s sharp rally now appears capable of reversing that trend:

→ Lower highs and lows at points A, B, and C had suggested a lower low at point D. Indeed, the price came close to setting it after a disappointing quarterly earnings report on 24 July, which led to a large bearish gap at the market open on 25 July.
→ Today, we may see the price break above point C’s high, signalling a potential end to the bearish market structure.

Candlestick analysis this week highlights strong bullish momentum:

→ On Monday (indicated by an upward arrow), trading opened with a bullish gap. However, sellers became active near the upper boundary of the aforementioned bearish gap (marked with a rightward arrow), causing the candle to close with a long upper wick – a sign of weakness.
→ The next two sessions demonstrated that buying pressure persisted – on Tuesday, the stock opened with a bullish gap and rose steadily throughout the day, with Wednesday’s strong candle further confirming buyer activity.
→ Yesterday, the price confidently broke through resistance at $22.25, moving towards the $23.75 level, which could be breached today.
→ The RSI indicator is now at its highest level since February.

The INTC share chart may be signalling that the prolonged bearish market, which began in 2021, is undergoing a significant shift in sentiment. This could mark the early stages of a rally – one that would be fundamentally justified if Intel does indeed secure government backing.

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