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This Dow stock could be set for a breakout as ‘old tech’ offers shield against volatility

As broader tech stocks endure the whims of a volatile market, Miller Tabak’s Matt Maley points to an old guard of the sector that could act as a shield.

Intel is “one of those stocks that people think about as an old-line name. However, the stock has actually been a high flyer for the last six to eight months,” Maley said Tuesday on CNBC’s “Trading Nation.”

“Beginning in the first half of 2017, Intel badly underperformed but it came back and has outperformed since basically the Fourth of July,” Maley said.

Intel shares have rallied 55 percent since hitting a 52-week low on July 10. Over that same period, the XLK technology ETF has gained around 20 percent. Intel is among the top 20 performers in the ETF this year and one of the best-performing Dow Jones industrial average stocks.

This Dow stock could be set for a breakout as 'old tech' offers shield against volatility

Intel looks even better from a longer-term perspective, said Maley.

“This rally has taken it above the trend channel, its upward sloping trend channel it’s been in since 2010,” he said. “On a long-term basis that’s very bullish.”

Intel hit a multiyear low in March 2009, the bottom of the financial crisis. Since then, its shares have surged 325 percent, stronger than the S&P 500‘s 300 percent rally.

This Dow stock could be set for a breakout as 'old tech' offers shield against volatility

Recent stock gains have also pushed the chipmaker above its key $50 level of support, a one-time level of resistance before January, said Maley. Intel closed above $50 in early March, lost that level during the tech sell-offs later that month, and has returned above it in recent days.

“As long as it can hold that level and can take out those old highs (in other words, the highs from March at $52.50) and give it a nice higher high, that would be very positive on a short-term basis,” said Maley.

Intel shares closed at $52.48 on March 26, its highest level of the year and its best since 2000. It currently sits 2 percent below that high.

Intel also has a fan in Michael Bapis, partner and managing director at the Bapis Group at HighTower Advisors. Bapis is bullish on most of what he refers to as “technology value names.” Veteran tech stocks present good value after having been brushed aside as focus turned to consumer-facing stocks such as Amazon and Netflix, he explained Tuesday on “Trading Nation.”

“People have forgotten about the real technology names from 20 years ago when they were the high flyers,” said Bapis. “You look at their earnings, you look at the growth that they’re having. The technology and R&D they’ve invested into their own companies makes me like the sector as a whole.”

The companies within the XLK ETF are expected to post an average 17 percent earnings growth this year and another 10 percent in 2019. Intel, Microsoft and Cisco are also forecast to report double-digit profit growth in this calendar year.

“I think you’re going to see these names start to even take off more once the market finds its footing,” said Bapis. “We’re in the middle of a massive technological revolution that we think is going to last another five to 10 years at minimum and these names are going to prosper.”

Cisco moved higher Wednesday, while Intel and Microsoft fluctuated around their flatline. The XLK ETF was also little changed.