INTEL, Daily
INTEL’s share price grew last year by more than 23.09%, while in just the first month of 2020,, the stock price has risen by 1.17%. Today the asset showed incredible strength by making an almost 20-year record high ahead of the earnings. Yesterday, the Jefferies analysts reassessed the shares of Intel Corp. and upgraded the shares from an underperform rating to a hold rating, with the price target changed from $40 to $64. The asset reached the $62.70 handle today.
Intel’s earnings report will be released after the US market closes tonight. It is estimated that returns for Q4 2019 will be around $1.24 – $1.25 per share, while revenue forecast is at $19.20 billion, an increase of about 3%, according to Zacks Investment Research. Over the last 2 years, the company has beaten EPS estimates 100% of the time.
At the CES Technology Expo, Intel announced the launch of a new foldable computer with the Tiger Lake line of processors. This could help the company’s demand to grow further. Technology trends such as 5G, AI and Cloud Computing will require a processing chip to have higher performance.
Meanwhile, Intel is experiencing a delay in the production of its 10nm Core processor, looking unable to meet market demand on time. According to a report by DIGITIMES, this will force the company to cut the prices for its processor chip in the second half of year 2020 in order to enhance its competitiveness. There are also reports that Intel may skip the production of 10nm processors to produce 7nm instead, even though the company has denied it.
Meanwhile, in the FX market, the asset price is continuously posting new highs. Therefore a miss in today’s earnings could weigh on the price. However even if the earnings turn out well, the asset already looks oversold, hence this might attract sellers in the near future.
From a technical perspective, bearish divergence has been noticed since early January, in contrast with Jefferies’ latest bullish call. This Bearish divergence can be seen on the MACD lines in the daily timeframe. This increases the odds of a trend reversal in the medium term.
Meanwhile, initial Resistance is seen at the 261.8 % Fibonacci level at $65. A decisive break above it could open the doors in the long term for a retest of the all-time high at $75.81 (August 2000). The immediate Support level is at the latest high of January 2, at $60.95. The next Support is at $58.80. If the latter is rejected the asset could find ground at the $55.50 level, which is the 3-month Support.
Today’s focus however should remain on the release of the 4Q revenue and EPS figures.
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Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand
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