Intel (INTC) 11/20/09 PriceWatch Alert Bearish Price Movement

Posted: Friday, November 20, 2009 8:09 AM EDT
By: Market Intelligence Center Staff

Intel (NasdaqNM: INTC) closed yesterday at $19.30. 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 18.77 and resistance in the 19.67 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 $17.65 area. That is also the break even stock price for this trade. This covered call has a 148 day duration, provides 8.55% downside protection and a 7.65% assigned return rate for an 18.86% 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 $5.50 debit. The trade has a 148 day life and would provide 6.74% downside protection and an 18.18% assigned return rate for a 45.00% annualized return rate (for comparison purposes only). Intel has a current annual dividend yield of 2.76%. [FBB-Seven Summits Research]