Intel Hits A Brick Wall Ahead Of Multi-Year High

Earlier this year, on January 27, Intel's stock ran up to an intra-day high of $38.45. Incidentally, the stock recorded monthly highs around this level in three instances in the past, once at $38.50 in December 2000, the next time at $38.59 in January 2001 and the third time at $38.22 in February 2001.

Since the January 2017 high, the stock has made unsuccessful attempts to break above this barrier. On April 27, the stock advanced to a high of $37.50 before pulling back. After cooling off, the stock still fell short, managing to get to a high of $37.33 on September 18.

In the subsequent seven sessions, the stock has been bouncing between $37.22 and $37.33, as it is facing a strong resistance that is stifling its progress beyond this range.

The Sell-side hasn't been active on this stock, with the last analyst action being an initiation by Hilliard Lyons on July 12. Out of the latest nine analyst actions, six have been downgrades.

It is evident that the sell-side sentiment on the stock isn't anything to write home about.

Intel is scheduled to report its fiscal year third-quarter results after the market close on Oct. 17. Analysts, on average, expect the chipmaker to report earnings of 80 cents per share, comparable to the year-ago quarter's. Revenues are expected to slip about 0.40 percent to $15.72 billion.

Fundamentally, the Intel story is still appealing, with the company having matched or exceeded earnings expectations for 13 straight quarters.

Intel is thus up against a wall and finding it difficult to break above. The stock has been consolidating in a broad range between $33.50 and $38. This mirrors the consolidation move of the broader market.

A lot will now depend on the broader market. If it convincingly moves out of the consolidation phase and pushes toward new high, it could be that Intel gathers enough momentum to break out of its range. Else if the market is on course for a protracted correction, the brick wall stifling Intel's shares could further solidify.