Intel (INTC) PriceWatch Alert Targets 22.10% Return

Posted on Monday, September 08, 2008 8:07 AM

Intel (NasdaqNM: INTC) ended the last trading session at $20.61. 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 19.84 and resistance in the 21.22 range. Technical indicators for the stock are Bearish 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 a Jan '09 20 covered call (NQ AD) for a net debit in the $18.53 area. That is also the break even stock price for this trade. This covered call has a 131 day duration, provides 10.09% downside protection and a 7.93% assigned return rate for a 22.10% 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 '10 15 Call (WNL AC) and selling the Jan '09 20 call (NQ AD) for a $4.67 debit. The trade has a 131 day life and would provide 4.56% downside protection and a 7.07% assigned return rate for a 20.00% annualized return rate (for comparison purposes only). Intel has a current annual dividend yield of 2.48%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]