Intel (INTC) is struggling again on Friday.
The stock is managed a slight rebound after last Friday's sell off before turning lower Wednesday morning. Intel is piercing a key trendline as this week comes to a close. It appears that overhead moving average pressure is in control and will likely drive shares lower in the near term.
Ahead of Intel's first-quarter earnings report, the stock was performing quite well. The stock had strung together nine straight gains and had moved well past the February and March highs. The day of the release, Intel traced out its best gain of the streak with the help of heavy volume. Unfortunately for the bulls, the post-earnings action was a sharp reversal. Intel dropped nearly 3.5% in its heaviest downside trade in six months. This steep decline left behind an ominous spike high at the April peak. Intel has remained lifeless under this cloud.
Intel is in danger of a deep pullback, one that could drop it another 5% from current levels. There is a very solid support zone in place near the 2017 lows. If this area, just above $34.50, is clearly taken out, more downside is ahead. The next level of support rests near $33.50, INTC's post-election low. A new base here would produce a very low-risk entry opportunity.
