BearMO's Blog : How to play Intel (INTC)

Robbing the Markets Blind has written winning naked puts on INTC (they will expire on Oct 22 for pure profit) but I would never do it today unless I write far out puts.

......because INTC share price has gone up  too high.....

.

INTC is currently priced at 24.27 at close of Wednesday business.

I went back and looked at it's five year chart history. It has been above 22.50 seven times. This is the seventh time. Five years ago it moved above 22.50 twice and both times felll back within two months. In the last 4 years (not counting the current price above 22.50) it only stayed aboved 22.50 for one month max before falling back to 22.50 or less.

So I can say for INTC to be above 22.50 is a exception and when it does go above 22.50, it doesn't last above that share amount for very long. The traditional wall street verbage  is that it is over-valued when it's above 22.50.

Buying INTC shares at this price is too risky. Writing short term puts on INTC also puts one at high risk. Writing a married covered call does no good. If one currently owns INTC, it might be a good time to sell.  If  you like it for the dividend, historically it appears you will be able to get it cheaper at a later date.

Sometime... all one needs to do is check price action on a chart. It's as simple as that.

  If you must then write the Jan 20 puts and pocket $44.00 per contract. Wait a minute! Maybe that's a winner to consider!  That's about 8% annualized. It doesn't pay 1% per month however... which is my goal.