Intel Stock as readers know is a favorite stock of mine for Trading Options strategies. In particular Intel Stock has been excellent for put selling. This morning AMD Stock has tumbled more than 11 percent after it reported an unexpected drop in sales. Advanced Micro Devices claims that business conditions became softer than they had expected later in the quarter due to sales in Both China and Europe. The drop of sales by better than 10% had an immediate impact on AMD Stock.
AMAT Stock is also down more than 2.5% as it cut its sales forecast as well. Intel Stock is down over 2% in sympathy with the other semiconductor companies. It would appear that China and Europe are indeed slowing which I would think will impact Intel Stock as well.But AMD and AMAT are nowhere near the size of Intel so it should be quite interesting when Intel releases its earnings later this month.
Hold Off Put Selling Intel Stock For Now
It’s important to always have a plan in place to take advantage of changes in the stock market and in specific stocks in general. I will be holding off further put selling in Intel Stock for now as I wait for the earnings due out later in July. With Intel stock already below $26.00, there is a good chance that it could fall below $25.00 before the earnings news is even released.
If Intel Stock should fall as July options expiry approaches I will roll put options that I presently have in Intel Stock, down and further out in time and I will reduce the number of put option contracts in the roll out and down.
Once I see where Intel Stock bottoms I will then consider more put selling.
Perhaps Goldman Sachs Is Right About Intel Stock After All
Recently I wrote an article about Intel Stock and the downgrade by Goldman Sachs. Perhaps this time their prediction is correct and investors will see a drop in Intel Stock back below $24.00. I believe if Intel Stock gets back below $24.00 or even $23.00 it will be an excellent put selling opportunity.
Having A Put Selling Plan With Intel Stock
I have always stressed the importance of having a plan when trading options. When Goldman Sachs released their outlook to clients I stopped put selling and am waiting to see what the earnings will bring before engaging in more put selling. At the same time I am not buying to close my sold naked puts yet.
Stock Technical Analysis Of Intel Stock
In the above 3 year stock price chart on Intel Stock I have marked where I believe support rests for the stock at present.
Looking out 3 years on Intel Stock I use stock technical analysis to spot support levels in Intel Stock to be prepared to do more put selling should the stock pull back further. I am already holding a lot of naked puts at varying strikes so it will be an easy matter to roll put options lower and out, but to have my plan ready in advance I want to know what levels I should consider for put selling to earn the best put premiums if Intel Stock should fall.
If I roll put options too low the premiums will be poor. The better trading options strategy is to find where I believe the support levels are in Intel Stock and roll to those levels if Intel Stock does pull back.
If selling in Intel Stock should be more than expected and the stock falls through my selected support levels, I believe Intel Stock will recover to those support levels in quick order. Therefore I want to be selling those put strikes if Intel Stock should collapse through them. Put premiums will be excellent should investors react as they did in AMD Stock and overshoot on the downside in Intel Stock.
In other words by using stock technical analysis over the past 3 years I can see there is reasonable support at $23 but better support at $21. Therefore the $22 strike could end up being the best choice for put selling in a heavy down day, if I do not want stock and the $23.00 strike a great level if I want to eventually own stock.
Intel Stock Trading Options Plan Going Into Earnings
Therefore if Intel Stock has a large down day when earnings come out or even before then, the stock may fall below $23, but because of the above stock technical analysis of the past 3 years of Intel Stock, I would sell both the $23 which could easily end up in the money and the $22 which might end up being at the money. If $23 falls into the money, the put premiums should be excellent as long as Intel stock stays between $21 and $23.
My plan will be to hold going into the earnings announcement and should Intel Stock collapse I will be put selling the strikes I have mentioned. If however Intel Stock does not collapse but actually has decent earnings I will still profit as I have a lot of naked puts sold on Intel Stock already. I find investing in Intel Stock easy when I have a plan in place before the earnings news is released. By knowing what I will be doing next there is no need to panic regarding the previous naked puts that I have sold, and should Intel Stock pull back harder than expected I know what put strikes I will be selling as well. Investing should always be this easy.