Intel Stock Pivotal Day

The recent selling in Intel Stock brought about by the reduced earnings warning from Intel, pushed Intel stock down 7.5% over a period of 3 days. Yesterday I sold more Intel Stock Puts at the Oct $22 put strike and I am preparing to roll my September in the money Intel Stock puts next week as September options expiry arrives on Friday. Meanwhile yesterday and again today I did some day trading in the stock. Any time the stock gets down close to the $23.00 level I check the Ultimate Oscillator and buy stock if it shows oversold. I then add 1% plus the cost of commissions and put in an offer to sell. I am not using the overbought condition on Intel Stock to sell my stock.

Day trading like this is straight forward since I know where support is within the stock and I know that should the stock fall beyond my purchase price and not recover I can turn to covered calls and collect the dividend while waiting for the stock to recover. It is a distinct advantage to be able to day trade and sell puts on stocks that I have confidence in for both support and recovery.

Intel Stock Day Trades With Ultimate Oscillator

Today’s trade really didn’t need the Ultimate Oscillator. In the morning the stock opened and promptly fell below $23.00. I jumped in and got 500 shares at $22.90. I added 1% to the purchase price which equals .23 cents and then $14 for the buy and sell commission. I put in my offer to sell at $23.15. A short while later it was filled. Simple trade, but based on the support level which I have mentioned several times.

Intel Stock Support and Resistance

This Intel Stock Chart shows where support lies based on volume.

Pivotal Day For Intel Stock

Today was pivotal for Intel Stock’s recent decline in value. The Intel Stock chart below shows the recent activity and why today was so important. Solid support rests between $22 to $23 in the stock. The last three trading sessions has seen buyers picking up the stock when it falls back to the upper support price of $23.00.

The volume technical indicator below shows that selling volume has decline dramatically and now Intel Stock has seen two days of buyers stepping in and picking up shares every time they dip to the $23 level.

The Fast Stochastic which looks out a day or two has turned bullish. The Slow Stochastic is not as bullish but it too has turned bullish. It is not important for Intel Stock at this point to go roaring back up. The Slow Stochastic is indicating that the likelihood of that happening is slim. Instead what an investor should be looking for is signs from the fast stochastic and slow stochastic that the support level is being defended by buyers and presently that is the case.

The Slow Stochastic has a lower bullish reading than the fast stochastic. This could be telling investors that tomorrow the stock could move higher, but in all likelihood a move up will then turn into a move sideways.

I am hoping for Intel Stock to move closer to the $24 valuation by next Friday so I can buy back my $24 puts for pennies and then roll out further in time.

Intel Stock Bullish signs

The selling is declining and buyers have emerged. Today was pivotal for Intel Stock

Defending Support in Intel Stock

When considering Put Selling a declining stock an investor wants to see if buyers are going to defend the support levels previously mapped out. To accomplish this set up the volume technical indicator and pick a few of the recent days of selling to study. For my chart below I have picked Wednesday and Thursday of this week. Both of these days sellers pushed Intel Stock down to support at $23.00.

By examining the volume technical indicator I then draw a line at the top-level of support which in the case of Intel Stock is $23.00. On Wednesday as the stock fell toward support at $23, buyers stepped in bought shares. More buyers than sellers is a green bar and more sellers a red bar. You can see that at the open buyers started buying then when the stock continued to fall, they stepped aside. There are three red bars signifying the sellers. When sellers had the stock below $23.10, a lot of buyers stepped in which is the long green bar after the three red bars. This shows that buyers are prepared to pick up shares at what they feel is good value. This supports the $23 price.

At the close yesterday, a lot of investors dumped shares, locking in gains for the day and some worried that Thursday could be worse. Indeed the stock opened higher on Wednesday than where it closed which is often a sign of weakness in the stock so it is understandable that at the close many investors who were waffling decided that since the stock did not close higher than the open, it was time to give up.

On Wednesday there are 13 green bars and 11 red bars. More buyers than sellers. This is a good sign and I sold puts on Wednesday for Oct $22 and I did one day trade on Intel Stock. I sold puts at $22 because volume showed me that buyers are not prepared to let the stock fall further. This tells me that while I could be early selling the $22 strike now, there is a good chance that the premiums I presently see on the Intel Stock $22 Oct put may be as good as they are going to get. There is never a guarantee, so I sold just 5 puts.

Today, Thursday Sept 13 is better news. The selling first thing in the morning is met was a long green bar. Buyers like myself stepped in and bought Intel Stock as it was pushed below $23.00. Much of the pushing lower in Intel Stock right at the open by investors was left over from Wednesday’s close.

It was a great sign that buyers stepped in right at the open and some got a great deal. Around noon hour some muted selling arrived, but buyers stepped in to pick up a few shares as Intel Stock touched $23.10. From there the stock rose the rest of the day. At the close some sellers sold but a lot of those would be day and swing traders.

Today the stock opened lower and closed higher. This is a very good sign that support may hold here at $23.00. Today there were 15 green bars and 11 red bars. More buyers than sellers which is a great sign. This is the second day in a row and today’s close above the open is often the sign that the stock is going to hold support.

Intel Stock Defending Support

To determine the risk factor of selling puts on a declining stock or even buying shares or options for a bounce back, consider adding the volume indicator to your chart.

Summary Of Intel Stock Pivotal Day

Now you know why I said today was a pivotal day for Intel Stock. Yesterday marked the first day where there were more buyers than sellers since the recent sell-off commenced. Yesterday was also important for determining if buyers were going to step in at the $23 level or let the stock fall further.

Today was the pivotal day. The open looked bad when Intel Stock fell below $23, but as soon as I saw the long green bar I knew that buyers were picking up shares of Intel Stock and supporting the $23 price level. I immediately bought my shares.

It should be interesting going forward from here. Friday could mark a turning point for Intel Stock from the recent sell-off. I will be watching the volume indicators to see if today’s buying can continue and push Intel Stock higher from here.

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  • Mule

    I hope you’re right but this looks like a QE3 bounce — tablets are decimating Intel.

  • Colin Manahan

    Teddi: Could you go in more detail what your volume technical indicator is mathematically? Thanks. Colin

  • Intel has quite a number of higher profit processors in the market place now and more to come. Here is an interesting article on 7 reasons to buy Intel Stock and why the idea that the PC is dead is a long way off.

  • DAVE

    Teddi, does short interest “interest” you?

  • Normally I always go with my technical indicators. I prefer mapping out support and then building my positions around support levels. I have seen too many shorts get killed in the past. Right now a lot of shorts on at $200 and they must be wondering what is happening. If you want to go short a stock I believe buy puts is less risk. You know your loss potential from the outset.