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Dow stock Intel could see sharp rebound after worst month in nearly a decade

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Handful of stocks flash rebound signal

Investors have taken the "sell in May" mantra to heart this month.

The Dow Jones Industrial Average has tumbled more than 6% from its October record, sending around two-thirds of the blue-chip index into a correction or worse.

Those losses have also pushed around 10 stocks' relative strength to 30 or below, the threshold that indicates oversold territory and that may signal a rebound in the making.

JC O'Hara, chief market technician at MKM Partners, sees one clear candidate for a comeback.

"When you screen those names, I think one that comes to the surface is Intel, " O'Hara said Thursday on CNBC's "Trading Nation. " "There's a lot of technical evidence building here that would suggest a bounce is likely."

Intel has traded this month at its most oversold level since 2006 with its relative strength index falling to a low of 20. From an April peak to its May bottom, the stock slumped 28%. Its shares are down 13% this month in its worst performance since November 2008.

"It's right on a key level of chart support -- $43 to $42 is an area that we've identified that has supported us for the last two and a half to three years so we really like the fact that it's extremely oversold, it's most oversold in over a decade, and sitting on significant chart support," O'Hara said.

The fundamental case for Intel also supports a comeback, said Michael Bapis, managing director at Vios Advisors at Rockefeller Capital Management.

"We're in the middle of a technological revolution that is going to shape the world for hundreds of years similar to the printing press, similar to the industrial revolution and for that you need semiconductors," Bapis said during the same segment. "Intel is leading that market."

Intel is the largest U.S. semiconductor producer, generating $70 billion in annual sales. That dwarfs the second-largest producer, Micron, which has $30 billion in annual sales.

"Although they've taken a hit recently … they're still growing their top line. And taking it a step further, they're trading at 9.5 times next year's earnings with an almost 3% dividend yield," said Bapis. "We're long this stock especially for 12 to 18 months."

Intel's 2.8% dividend yield surpasses the average of 2%. The company has raised its dividend every year for the past five years.

Disclosure: Vios Advisors holds Intel shares.