Intel (INTC) 11/2/09 PriceWatch Alert With 8.63% Downside Protection

Posted: Monday, November 02, 2009 8:40 AM EDT

Intel (NasdaqNM: INTC) ended the last trading session at $19.11. So far the stock has hit a 52-week low of $12.05 and 52-week high of $21.27. Intel stock has been showing support around 18.46 and resistance in the 19.66 range. Technical indicators for the stock are Bearish and S&P gives INTC a positive 4 STAR (out of 5) buy rating. INTC appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at an Apr '10 19 covered call (NQ DT) for a net debit in the $17.46 area. That is also the break even stock price for this trade. This covered call has a 166 day duration, provides 8.63% downside protection and an 8.82% assigned return rate for a 19.39% 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 '11 12.50 Call (VNL AV) and selling the Apr '10 19 call (NQ DT) for a $5.20 debit. The trade has a 166 day life and would provide 7.38% downside protection and a 25.00% assigned return rate for a 55.00% annualized return rate (for comparison purposes only). Intel has a current annual dividend yield of 2.94%. [ABR-Seven Summits Research]

Click Symbol For More News On: (INTC)