EOT Trade Alert – January 8, 2016

Trade Alert:

Buy INTC March 18th 2016 $33.00 calls at $1.00 or better

 

Company Background:

Intel (INTC) designs, manufactures, and sells integrated digital technology platforms worldwide.

 

Short-Term Catalyst:

Stocks have gotten off to a horrible start to 2016.  Investor fears have grown as China’s stock market tanks and fears that the first Fed rate hike will cause risk assets, like stocks, to undergo a major correction.

I think these fears are overblown.  After all, US economic data is improving… Did you see that amazing jobs number yesterday?  The US added 292k non-farm jobs in December.  That was much better than predictions of 215k.

This presents us with an opportunity to buy calls on a great stock like INTC while the options are cheap.

INTC is down 7.5% in the first few weeks of the year.  Now it is near support of the 200-day moving average.  Needless to say, a selloff of this magnitude seems to be overblown given the backdrop of improving US economic data.

The stock should rebound and send the call options soaring in the weeks ahead as investor fears subside in the weeks ahead.

 

Trade Details:

Underlying Stock Symbol:	INTC
Current Bid-Ask Price:	$0.86- $0.89
Option “Buy Up To” Price:	$1.00
Break-Even On Stock At Expiration:	$34.00
Maximum Risk Per Contract:	$100.00

 

Exit Strategy:

INTC is trading at $31.88 per share.  Resistance levels will be at $33.00 and $35.00.  Remember, we want this stock to move higher.  Support levels will be at $31.00 and $30.00. Conservative investors should look to exit at the first support or resistance level. Aggressive investors may want to hold for a bigger move.

 

Chart:

 

Category: EOT Trade Alert