Multiple Key Readings Say 'Buy the Dip' on Intel Stock

Chipmaker Intel Corp (NASDAQ:INTC) has pulled back to its three-month (63-day) moving average to a two-month range low. The shares are trading around $110, an area that marks a 200% year-to-date gain. Last week’s low was just above the put-heavy, round-number 100 strike.
 
Intel stock's 14-Day Relative Strength Index (RSI) is at mid-March levels, which preceded a powerful rally into mid-May. 

 

 

In the options pits, there’s a buildup of call open interest (OI) at the 130-150 strikes for July expiration. The selling related to an unwind of long positions associated with this call OI is likely exhausted after the late-June peak at $142.
 
Options are cheap, with Intel’s implied volatility (IV) of 87% cheaper than its 63-day historical volatility (HV) of 108%.

 

Our recommended September call has a leverage ratio of 3.5 and will double on a 31.2% rise in the underlying equity