Intel's Shares Look Appealing When Examined Quantitatively
A Pullback to approximately 15.15/share during "after-hour" trading on 4/14/09 is quantitatively appealing in establishing a long position on Intel (INTC).
The close of 16.01 places INTC on a bullish stance, according to the following technical indicators:
A. Composite Indicator-- Which is a Trend Spotter (TM)
B. Short term Indicators-- The 10-8 Day Moving Average Hilo Channel, 20 Day Moving Average Versus Price, 20-50 Day MACD Oscillator, and 20 Day Bollinger Bands suggest a buy. The 20 Day Average Volume is 66859422.
C. Medium Term Indicators-- The 50 Day Moving Average versus Price, 20-100 Day MACD Oscillator, and 50 Day Parabolic Time/Price suggest a buy. The 50-Day Average Volume 70653359.
D. Long Term Indicators-- The 100 Day Moving Average versus Price, and 50-100 Day MACD Oscillator suggest a buy. 100-Day Average Volume - 68089414.
On 4/15/09, assuming the shares commence trading at 15.15, the May strike 15 calls would open the trade at approximately .76/contract. This would give the new shareholder .61/contract in intrinsic time value till option expiraton, assuming the calls are written. Moreover, the shareholder has a downside protection to 14.54/share which is the March 17 2009 pivatol (infliction) point. At 14.53/share, the May Strike 14 calls would probably trade between .97 to 1.00/contract, offering the accumulation of new shares a juicy .44 to .47/contract in intinsic time value and a downside protection to 13.56-- which is a solid 5 month support level. At 13.56/share, the May Strike 13 would bid .88 to .90/contract giving the investor .32/contract in time value and a downside protection to 12.68.
The dollar-cost-average pyramid hedged with may calls stated above provide roughly a 72% downside protection against the underlying shares, but only 48% when hedged with put options with similar strikes. - 23196
The close of 16.01 places INTC on a bullish stance, according to the following technical indicators:
A. Composite Indicator-- Which is a Trend Spotter (TM)
B. Short term Indicators-- The 10-8 Day Moving Average Hilo Channel, 20 Day Moving Average Versus Price, 20-50 Day MACD Oscillator, and 20 Day Bollinger Bands suggest a buy. The 20 Day Average Volume is 66859422.
C. Medium Term Indicators-- The 50 Day Moving Average versus Price, 20-100 Day MACD Oscillator, and 50 Day Parabolic Time/Price suggest a buy. The 50-Day Average Volume 70653359.
D. Long Term Indicators-- The 100 Day Moving Average versus Price, and 50-100 Day MACD Oscillator suggest a buy. 100-Day Average Volume - 68089414.
On 4/15/09, assuming the shares commence trading at 15.15, the May strike 15 calls would open the trade at approximately .76/contract. This would give the new shareholder .61/contract in intrinsic time value till option expiraton, assuming the calls are written. Moreover, the shareholder has a downside protection to 14.54/share which is the March 17 2009 pivatol (infliction) point. At 14.53/share, the May Strike 14 calls would probably trade between .97 to 1.00/contract, offering the accumulation of new shares a juicy .44 to .47/contract in intinsic time value and a downside protection to 13.56-- which is a solid 5 month support level. At 13.56/share, the May Strike 13 would bid .88 to .90/contract giving the investor .32/contract in time value and a downside protection to 12.68.
The dollar-cost-average pyramid hedged with may calls stated above provide roughly a 72% downside protection against the underlying shares, but only 48% when hedged with put options with similar strikes. - 23196
About the Author:
Dr. Jack Haddad, MD, MBA has been professionally trading the stock market since 1997 and had an annualized return of 39.4%. Dr. Haddad has recently launched MD Capital Management, an Investment Fund with Charles Schwab. The fund utilizes option hedging techniques to generate returns while minimizing risks. For more info, visit Jack's online group: MD Capital Management.
posted by X - Men @ 1:43 AM
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