Intel [NASDAQ:INTC] tumbled 2.18% to an intraday low of $32.48 today before it bounced back to close at $32.72. The stock closed below the 200-day SMA for the first time since April 2013. BMO Capital Markets said on Friday that notebook shipments, from original design manufacturers, in the first quarter 2015 are expected to fall 6% year-on-year, while motherboard shipments will likely decline 9%.

The market was hoping that the PC market would stabilize this year as Intel’s PC Client Group generated the largest chunk of Intel’s business, which was about 62% of its $55.9 billion 2014 full year revenues.

Last November, Intel said that the company would be combining its mobile division and its PC division this year to create a Client Computing Group (CCG). The merger between the two divisions will enable Intel to focus on the mobile and PC businesses simultaneously, as well as to hide billions of dollars in losses from the mobile business.

For the full year 2014, the mobile and communications group had only $202 million in sales and operating losses of $4.2 billion. Intel said during the earnings conference call that the company managed to ship about 46 million tablets by year's end but took a huge loss, mostly by subsidizing the tablet makers to use its chips.

The report on the slowdown of notebook and motherboard shipments came before Sunday’s downgrade of Taiwan Semiconductor Manufacturing Corp. [NYSE:TSM] by Pacific Crest to a Sell, citing near-record inventory levels at TSM’s top five customers including Qualcomm [NASDAQ:QCOM], Mediatek [TWSE:2454], Nvidia [NASDAQ:NVDA], Broadcom [NASDAQ:BRCM] and Marvell [NASDAQ;MRVL].

About five years ago, Intel established its Intel Custom Foundry (ICF) division within its Technology and Manufacturing Group (TMG) in order to directly compete with foundry companies like TSMC and Samsung [KRX:005930]. Thus far, Intel’s foundry business, which primarily offers 14-nm Intel manufacturing technology, has only six customers including Altera [NASDAQ: ALTR], Panasonic [TSE:6752], and other mid-size fabless companies.

From our technical viewpoint, INTC could be under selling pressure as the share price was pushed to close below the 200-day SMA. A bearish head-and-shoulders pattern, within the symmetrical triangle, has now emerged in the Intel’s chart. A further pullback could send the stock downward to retest the $30.07, or 38.2% Fibonacci retracement level. Another support will be at $29.25, or the base of the head-and-shoulders pattern.

Of course, INTC can bounce off the trendline supports as the two-year trendline support and low-trendline of the symmetrical triangle are still in tact. 

Intel will release its first quarter 2015 earnings report on April 13-17. Wall Street is expecting revenues of $13.7 billion and an EPS of $0.48 per share. 

Disclosure: No Position in INTC or any other stocks mentioned.