The decline in Intel stock is catching a lot of investors with losses. The stock in 2015 has been in a strong and steady decline. Investors remain worried about the outlook for PC sales and have decided that Intel cannot continue to crank out enough profits to keep the stock afloat. But Intel has many product lines including growing cloud servers, numerous handheld devices and many industrial applications from cars to weapons and software apps, that most investors are not aware of. Studying Intel’s website provides a wealth of information about what the company is doing, what product lines they have and their dominance of the semi-conductor industry in general.
Intel Stock Chart for 2015
The chart below for 2015 shows the problem investors are facing. The stock is in a general decline. It has had declining tops which is a classic signal of a stock in trouble. The most telling is the recent break of the prior year’s low which sets up the stock for further declines.
With Money Flow you can see two important indicators at present:
- A marks June 4 when the Moneyflow indicator changed from positive inflows to outflows of stock. In other words investors are selling more shares than are being bought. Buyers are drifting lower and causing sellers to chase buyers. This is pushing the stock down.
- B marks the present break of the prior low. Instead of investors jumping in on the break most are still selling. New money is not flowing into Intel which is a negative sign following the recent break. If you look at the prior low period back in late March you can see that money flowed back into Intel following that drop and the stock rallied for almost 3 months. This is not happening at present.
The volume indicator is predominantly sellers although the average daily volume levels are slowly starting to reappear after some fairly heavy selling and a couple of days of buying. With the stock deeply oversold volume could be advising that the selling is slowing and buyers may return shortly.
This brings us to today’s Intel question from Larry. Larry is holding a number of positions which are caught underwater and he is wondering how to handle the decline.
I have sold 5 Puts july 24 $29 @.29
5 puts July 24 $30.50 @.31
5 puts July 31 $29.50 @.34
5 puts August 14 $28.50 @.50
Which is the most urgent to repair and any recommendations. I currently hold 1,000 shares of Intel at a cost base of 29.42 with 5 CC $29.50 strike @.46 expiring July 31.
4 Rescue Strategies To Consider
When it comes to rescuing a trade in a stock that is declining, I prefer not placing more capital at risk while the stock is trying to find a bottom. Instead I prefer to keep the capital I have committed to the stock, working as hard as possible to earn additional income. I also want the flexibility of being able to take advantage of the decline to earn more profits and setup the trade to benefit from lower prices. In the case of Intel Stock if I loved it at $29 then I certainly will love it more at $28 or $27 or $25 but I need to have the rescue provide enough flexibility so that I can take advantage of the decline to, in the end, benefit my entire portfolio.
This strategy discussion article looks at 4 rescue strategies any investor could use to rescue a trade such as Larry’s Intel trade. The article is lengthy at 3100 words and requires 9 pages if printed but it covers a lot of questions regarding rescuing positions in general. This article is designed for members. Presently it is available for USA Members and will be made available shortly for Canada members.
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Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.
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