Event: Intel (INTC) reports Q2 results after the close. The options market is implying about 3.5% one day post earnings move which is a tad higher than the 4 quarter average one day post earnings move of 3.35%, but essentially in line with the 10 year average.
INTC is making a new 52 week high today, up in sympathy with Microsoft’s better than expected quarter last night, despite the pockets of MSFT’s strength having little overlap with INTC.
INTC is up nearly 20% in a straight line since its post Brexit decline in late June, a truly astounding run, potentially already discounting any Q2 beat and upbeat guidance:[caption id="attachment_65154" align="aligncenter" width="600"] INTC 1yr chart from Bloomberg[/caption]
Today’s new highs puts a re-test of the 15 year highs in play made back in late 2014 near $38, some 6% higher:[caption id="attachment_65155" align="aligncenter" width="600"] INTC 5yr chart from Bloomberg[/caption]
Lastly, the 20 year chart shows just how important a retest of the 2014 highs could be, as there is little overhead resistance:[caption id="attachment_65156" align="aligncenter" width="600"] INTC 20 yr chart from Bloomberg[/caption]
I am hard pressed to think that INTC will be able to guide high enough that it would cause a re-rating of the stock, back towards a market multiple. But the potential for greater than expected cost savings from their recent purchase of Altera, plus an acceleration of sales growth to mid single digits could cause a stock breakout for sure.