It’s been “what’s inside” for more than a long while. Now though, traders need to embrace the new Intel Corporation (NASDAQ:INTC) and “experience amazing” both off and on the INTC stock chart. Let me explain.
Most of us — well of a certain age at least — are familiar with Intel’s memorable ad campaign and slogan, “Intel inside.” The ads reminded us of how important Intel was to the functioning of our PC’s back before selfies and checking social media countless times a day became all the rage.
But these days INTC stock is so much more than the power behind personal computers — and thank god for that, given today’s demand for being mobile and connected. With that in mind, Intel did do a marketing reboot of sorts this past year.
The “experience amazing” campaign allows consumers to consider the company’s broad reach into everything from mobile devices, data centers, 3D printers, robotics, solar-powered cars, the wearables market and of course, drum roll please — PC’s.
And if INTC stock’s most recent earnings report is any indication, Intel’s ever-broadening reach is working. Back in late July the company beat Street views on both its top and bottom-lines, offered up decent year-over-year sales growth, upwardly revised guidance and a “bring it on” message.
Now, and with “experience amazing” tied to Intel’s increased business wherewithal, INTC stock has broken free of its own penalized “what’s inside” doldrums and is opening up the possibilities for bulls to experience amazing things once more.
Intel Weekly Price Chart
Click to Enlarge
Technically speaking and for the past three years, INTC stock has been all about “what’s inside” as shares failed to participate in the broader market’s historic bull run.
But that now appears to be changing for the better.
As the provided weekly chart illustrates, Intel shareholders look to have just entered into a more liberating “experience amazing” bullish cycle with last week’s breakout from a year-long high-level double bottom or “W” style base.
With the slightly irregular “W” consolidation having formed inside an even larger two-year corrective pattern, the breakout to fresh 17-year highs and woeful under-performance supports a potentially very favorable trend and momentum shift for INTC stock and its bullish investors.
INTC Stock Collar Strategy
With INTC stock’s growth opportunities looking good off and on the price chart and offering a decent 2.8% dividend to boot, I like the idea of collaring Intel shares to ride an anticipated steadier, but healthy, trend higher, while guarding against being long and wrong.
One preferred combination is the Nov $42 call/$38 put collar. The slightly non-symmetrical construction is priced for $39.77 versus buying INTC stock for $38.38.
If INTC rallies higher, the trader is initially capping profits at a fairly healthy 5.6% due to the positioning of the sold call at $42 a share. But an adjustment to the collar means remaining long Intel shares and ability to capture even greater gains is certainly possible in the event of continued follow-through.
On the downside and for the additional 1% of premium, the collar guarantees if INTC drops below $38, the trader’s loss is contained to 4.45%.
As $38 lines up technically with last week’s key breakout, and with earnings on the horizon and INTC’s typically lower volatility behavior generally less well-contained in the aftermath of quarterly results, the collar looks more than a bit reasonable in our view.
Investment accounts under Christopher Tyler’s management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. . For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits and feel free to click here to learn more about how to design better positions using options!
