Intel Stock Could Correct By 10% According To Goldman – Got A Plan?

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Intel stock has been in my portfolio for years. Intel stock has been excellent for my put selling strategy. Recently Goldman Sachs advised clients they should expect Intel Stock to decline as much as 10% on their earnings announcement on July 17.

A 10% drop in Intel Stock would be quite a surprise for many investors which brings up the question what is Goldman Sachs up to? Is this stock manipulation? Are they trying to weaken Intel Stock to get more clients in or do they actually believe that the quarterly earnings will be that bad? A 10% drop would place Intel stock around the $24 level. Does this seem likely? If this does occur and you are short options did you have a plan in place before selling options on Intel Stock?

Intel Stock Price 1 Year Chart

Intel Stock 1 Year Chart

The one year chart on Intel Stock shows that support is between $23 to $24.

Looking at the one year Intel Stock price chart above I can apply a little Stock Technical Analysis to figure out that $24.00 does not seem out of line. In May and June of this year, Intel Stock fell below $25. I have marked these on the chart. However actual support in Intel Stock sits lower than $24. It probably is somewhere between $23 and $24 which is where support was in the fall of last year.

Intel Stock is Not Just Processors

Today semiconductors are found in everything from washing machines and cars to computer components. A lot of investors do not understand that Intel’s market is quite varied. If there is a slowdown in the US economy and Global economies this will be reflected in the purchasing of consumer products which could make Intel Stock more sensitive to weakness in such purchases.

Today’s employment numbers surprised a lot of investors but despite what the media is painting, the US economy is continuing to grow employment, just not at a rate that would reduced the unemployment number each month. But if those employment numbers should turn back negative, all stocks will fall including Intel Stock.

Intel Stock January Put Activity

Intel Stock January Puts

The January 2013 Puts For Intel Stock shows high volume for both the $24 and $21 put strikes

There was a lot of activity with the Intel Stock January 2013 $24 and $21 puts. A very large volume was traded today. Exactly what the option trader is doing I can only surmise, but the volume of option traded does make for an interesting Friday on Intel Stock.

My Plan For Intel Stock

The importance of having a plan when investing cannot be understated. In the case of Intel Stock I had a plan in place prior to selling my naked puts and naked calls. It was also in place before Goldman Sachs comment on Intel Stock’s impending 10% correction.

I am continuing to hold all my Intel Puts and should the stock fall I will roll put options out and down and reduce the number of put contracts. However I will also be selling more puts at lower strikes if a 10% correction occurs to take advantage of the volatility if that type of correction does happen.

If you look at my Intel stock latest trades here you can see that I am holding the July 21 expiry, Intel Stock naked puts at $24, $25 and $26. I am also holding naked calls at $27.00.

If there is a 10% correction all of these naked puts will end up in the money and will be these put options will be rolled down and out further in time. The $26 will be rolled down to $25, the $25 rolled down to $24 and the $24 rolled down to $23.00

I will then do more put selling and sell either the $22 or $21 put strikes depending on how severe the correction is in Intel Stock. With a plan in place prior to selling options, I am prepared for either a correction or a rally. This means no panic, no big losses and no need to lose sleep. I already know what my course of action will be if Intel Stock falls.

The Key To Put Selling Success With Intel Stock

For those investors who have sold options on Intel Stock, what is your plan? Having a plan is a key aspect of my success with put selling and naked calls. My plan is in place and ready before Intel Stock options are sold. Was your plan in place before you sold options on Intel Stock? Part of the success with put selling profitably is knowing in advance what my next action will be depending on the outcome of the option trades. Should the option trade need to be adjusted I can do so profitably and continue to generate income despite a move lower for Intel Stock.

When it comes to put selling I have a very long time frame and should a stock correct far more than I expected I take my time and keep rolling for months or as in the case of my Microsoft Trade from 2010, I can roll for years if need be.

My Intel Stock Outlook

My outlook for Intel Stock is not as dire as Goldman Sachs. The summer months tend to be weak for technology sales in general including Intel Stock. With September back to school sales and December Christmas sales, I would expect Intel Stock will recover any 10% correction by this fall.

As well Intel recently announced a number of tablet manufacturers will be carrying Intel’s latest clover chip in their new tablets including Windows 8 products. So while this bodes well for Intel Stock apparently Intel insiders have sold a total of $60.62 million dollars of Intel Stock in the last three months ranging from $26.42 to $28.98.

So if Goldman Sachs is right and Intel Stock does pull back 10 percent, I have no need to worry since my plan is already in place and I know the steps I will take with Intel Stock. I hope other investors have their plans ready as well.

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  • Aircontrolto

    It probably means Intel is going to skyrocket with earnings. Didn’t Goldman Sachs just recommend shorting the S&P a week ago right before it jumped up 5% last week?

  • If Intel Stock does fall I will be ready for more put selling income.
    Teddi