Intel Stock Flat Ahead of Q2 Earnings Report

The equity remains up 19% year-over-year

Fernanda Horner
Jul 21, 2020 at 3:09 PM
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The shares of Intel Corporation (NASDAQ: INTC) are trading sideways at $61.13 this afternoon, putting their five-day winning streak on the line. This lackluster price action comes a few days ahead of the chip giant's second-quarter report, due after the close on Thursday, July 23. Below, we will take a look at how the equity has performed on the charts as of late, and explore some of the options activity surrounding INTC ahead of the event.  

The equity slowly churned higher on the charts after dropping to mid-March lows near the $43 level. Plus, the subsequent pullback found support at the $58 level, which coincides with INTC's 200-day moving average. Longer term, Intel stock sports 19.2% lead year-over-year.

  INTC

Analysts were skeptical of the equity coming into today. Of the 25 in coverage, 16 carry a tepid "hold" or worse rating. Meanwhile, the 12-month consensus target price of $62.86 is a slim 2.8% premium to current levels.

In the options pits, however, the appetite for calls is high. In the last 10 days, 3.03 calls were bought for every put at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 94% of readings from the past year, meaning calls are being picked up at a faster-than-usual clip.

That bullish sentiment prevails today. At last check, 27,000 calls have changed hands, which is more than twice the number of puts traded. The January 2022 100-strike call is most active, followed by the January 2021 80-strike call, as LEAPS traders position for upside in the long term.

Lastly, a look at the equity's history of post-earnings reactions during the past two years shows a generally mixed response. During its last eight reports, half of these next-day sessions were lower, while the other half was higher, including a 8.1% jump in January and a 9% slip in April 2019. The security averaged a post-earnings swing of 5.5% the last eight quarters, regardless of direction. This time around, the options market is pricing in a slightly higher move of 7.2%. 


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