Shares of Intel (INTC) made a new 52 week high last week following the companies positive pre-announcement for their current quarter:
The company now expects third-quarter revenue to be $15.6 billion, plus or minus $300 million, as compared to the previous range of $14.9 billion, plus or minus $500 million. The increase in revenue is primarily driven by replenishment of PC supply chain inventory. The company is also seeing some signs of improving PC demand.
The company is forecasting the mid-point of the third-quarter GAAP gross margin range at 62 percent, plus or minus a couple of points, up 2 points versus the prior third-quarter GAAP outlook gross margin midpoint of 60 percent, driven mostly by higher PC unit volume. The midpoint of the third-quarter non-GAAP gross margin range is now forecasted at 63 percent, plus or minus a couple of points, up 1 point versus the prior third-quarter non-GAAP outlook gross margin midpoint of 62 percent.
The stock found some technical resistance at the two year high made in late 2014:
The stock’s ability to establish a new trading range above the levels detailed above could create a squeezy situation if the company were able to guide up for Q4 when they report on Oct 18th. There is NO overhead resistance until that massive gap on the way down from its dotcom bubble highs in 2000:
Which leads me to some unusual options activity today. When the stock was trading $37.16 there was an opening buyer of 50,000 of the Nov 41 calls (or $800,000 in premium). These calls break-even at $41.16, up about 10% from the trading level. I think it is safe to say that despite the quantity of contracts, the out of the money nature, and thus the low delta (about 11) this is not a particularly convicted bullish bet in Intel, and may merely represent a long holder leveraging up in the event of a long awaited breakout.
Remembering that INTC was one of the largest market caps in the world back in 2000, the stock’s under-performance to the broader index has been notable since the lows in 2009, especially when you consider that the Nasdaq just made a new all time high, and Intel remains 50% from its highs made in 2000, despite booking nearly $700 billion in sales since:
At least one trader now thinks that a squeeze into that post dot com ether is at least possible.