INTC is set to snap a five-day winning streak
Intel Corporation (NASDAQ:INTC) stock is down 1.4% to trade at $48.64, among the worst Dow stocks today and on track to snap a five-day winning streak. Earlier, the blue chip received a downgrade to "equal weight" from "overweight" at Barclays, as well as a price-target cut to $53 from $62. The analyst in coverage attributed the bearish note to steep competition for the chipmaker.
More specifically, the competition Barclays was referencing comes from rival chipmaker Advanced Micro Devices (AMD), which conveniently received a price-target hike to $15 at Barclays today. Looking at INTC, the stock scored a 17-year high of $57.59 on June 4, but since then has given back 15.5%. Since gapping lower in the wake of a subpar earnings reaction in late July, the shares are staring up at their 160-day moving average.
While many analysts lately have noted escalating AMD competition for INTC, additional downgrades and/or price-target cuts could be on the way. Of the 30 brokerages covering INTC, 14 still rate it a "buy" or "strong buy." In addition, the security's average 12-month price target of $56.03 sits at a 15% premium to the stock's current perch. And although short interest fell in the two most recent reporting periods, the 83.31 million shares sold short represents a meager 1.8% of INTC's total available float.
Traders looking to take advantage of INTC's struggles may want to do so with near-term options, which are attractively priced at the moment. INTC stock currently sports a Schaeffer's Volatility Index (SVI) of 21%, which ranks in the 15th percentile of its annual range. This suggests that near-term options are pricing in relatively low volatility expectations at the moment, which could help maximize the benefit of leverage for premium buyers.
Furthermore, Intel stock has been a good target for premium buyers during the past year. That's according to its Schaeffer's Volatility Scorecard (SVS) of 82 out of 100, which shows it's tended to make much bigger-than-expected moves on the charts compared to what the options market was expecting.