A couple of weeks ago we rehashed a little bull / bear debate on INTC (read here) when the stock was $31. We reiterated a trade that we had legged into in late April (here), and detailed on CNBC’s Options Action:
Here was the trade:
Trade: INTC ($31) Buy July 30 Put for 45 cents
Break-Even on July Expiration:
Profits: below $29.55
Losses: up to 45 cents between 29.55 and 30 with max loss of 45 cents above 30
Now with the stock at $29.63 the July 30 puts are worth more double what we paid and we are going to close half and leave the other half on as we have taken our risk off of the table.
Action: INTC ($29.63) Sold to Close half of the July 30 puts at 1.08 for a .63 gain
But I want to reiterate that the 20% decline in Micron (MU) and now AMD down 15% today reinforces the potential for a large move on a guide down in INTC next week. My worry would be how much of the news will be in the stock by then. But this chart is shaping up to be a textbook head and shoulders top formation with the stock now below important support at the neckline of $30.
We will look to add back or possibly roll out on a bounce prior to earnings on July 15th.