Investors like to celebrate the market’s big winners.

Trillion-dollar valuations earn headlines – as do cutting-edge technological advancements.

That’s why no company grabs the spotlight more than Nvidia (NVDA). The chipmaker’s products are in high demand to power artificial intelligence applications.

At the same time, if we only focus on winning stocks like NVDA, we can lose sight of the stocks that have fallen from grace.

After all, for every dominant player, dozens of companies have fallen on hard times… or been left behind technologically.

And if you know what to look for, you can find profitable trading opportunities among these struggling stocks.

So today, let’s take a look at one “fallen angel” that’s angling for a turnaround…

Intel Lost Its Throne

Since the start of 2024, Nvidia has added over $2 trillion in market value.

Over the same period, Intel (INTC) has seen $116 billion wiped out.

The decline in INTC shares started years ago. After peaking in 2021, INTC has dropped by 68%.

Take a look for yourself in the chart below:

Intel is still one of the largest semiconductor companies in the world by revenue. But the company has fallen behind its peers.

For example, Nvidia outsources its most advanced chip manufacturing to Taiwan Semiconductor… Intel’s biggest competitor.

So Intel is spending massive sums to try to catch up. That’s why the share price is taking a beating.

Of course, I’m not here to tell you if Intel can right the ship and rule its industry once again.

But as a trader, you should pay attention to a chart setup that has sparked massive moves in the past…

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Intel’s Double Bottom

When a stock sharply declines, you may be tempted to guess when it has hit bottom. But that can be risky – like trying to catch a falling knife.

The key is to exercise patience and wait for the right setup that maximizes return and minimizes risk.

Intel has seen rebounds in the past. Take a look from the start of 2022 through the end of 2023:

Following a freefall, INTC found support at the $25 level in October 2022 at “A.” Then it tested that level again in March 2023 at “B.”

That showed a potential “double bottom” was in place. A double bottom is a classic reversal signal.

This setup became even more appealing due to the action in the Relative Strength Index (RSI).

The RSI made a higher low at the second test of $25, shown with the dashed trendline.

That sparked a rally that helped INTC double in price over the next 10 months.

Now let’s look at more recent price action in the chart below…

From its late 2023 peak around $50 to last August (“A”), INTC plunged by 62% to the $19 level.

From there, INTC tried to rally but pulled back. It recently tested $19 again at “B.” That shows another potential double bottom in place.

And like the previous example, this double bottom also shows a positive RSI divergence with a higher low. (See the new dashed line.)

The stock price is finding traction and recently crossed back above the 50-day moving average (blue line).

So while it’s still early, this is a chart to watch. If INTC keeps heading in this direction, it could signal the early stages of another rebound.

Happy Trading,

Larry Benedict
Editor, Trading With Larry Benedict