Intel (INTC, $15.52, up $0.87) rallied 6% today which wasn’t hard given the 500-point pop we got in the Dow today. If you didn’t notice, Tech was strong today and the chip sector rallied right along with it.
In the March 15th Weekly Wrap, I had mentioned that Intel had broken through its 20, 50, and 100-day moving averages and appeared ready to challenge its 200-day average of $17-$18. That Monday, the stock fell 3% after accusing Advanced Micro Devices (AMD, $3.02, up $0.35) of breaching a cross-licensing agreement which allowed us to get into the April 15 calls (NQDC, $1.12, up $0.43) at 60 cents or better.
These call options have now nearly doubled. What was interesting was that the March 15 calls (NQCC, expired) also doubled at one point last Friday when they traded as high at 50 cents as the stock hit $15.40 that morning. They were profiled at 22 cents but I mentioned how I liked the April 15 calls more.
In any event, Intel had its estimats raised this morning after an analyst did some homework but we are already looking to get out of this trade. I had talked about Intel testing $17-$18 and we could get there if the rally holds this week. However, we could start to find resistance a little early at $16 which could but a drag on the time premium.
If so, try and set stops at $1.00 or 90 cents to protect profits.