Intel (INTC) PriceWatch Alert Down To $20.00 Break Even

Posted on Tuesday, July 22, 2008 8:07 AM

Intel (NasdaqNM: INTC) closed yesterday at $22.09. So far the stock has hit a 52-week low of $18.05 and 52-week high of $27.99. Intel stock has been showing support around 21.80 and resistance in the 22.40 range. Technical indicators for the stock are Bullish and S&P gives INTC a neutral 3 STAR (out of 5) hold rating. INTC appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at an Oct '08 21 covered call (NQ JU) for a net debit in the $20.00 area. That is also the break even stock price for this trade. This covered call has an 88 day duration, provides 9.46% downside protection and a 5.00% assigned return rate for a 20.74% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the INTC Jan '09 15 Call (NQ AC) and selling the Oct '08 21 call (NQ JU) for a $5.21 debit. The trade has an 88 day life and would provide 8.51% downside protection and a 15.16% assigned return rate for a 63.00% annualized return rate (for comparison purposes only). Intel does not pay dividends at this time. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]