INTC has struggled to breakout in recent months
Intel Corporation (NASDAQ:INTC) is sitting at the top of the Dow today, after BofA-Merrill Lynch upgraded the chip stock to "buy" from "neutral," and lifted its price objective to $60 from $52. The analyst in coverage called INTC a "compelling large-cap investment," and waxed optimistic on the company's shift to a more data-centric model.
At last check, Intel stock is up 4.3% to trade at $46.63, earlier running out of steam near their year-to-date breakeven mark at $46.93. The shares closed out 2018 with a modest 1.7% gain, spending the latter portion of the year churning between the $45-$50 trading range. Plus, INTC has not touched the $60 mark since 2000.
Should INTC break out of its lull in 2019, there's plenty of skepticism to unwind, which could keep the wind at its back. Of the 30 brokerages covering the chip stock, 17 rate it a "hold" or worse.
Plus, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), INTC's 10-day put/call volume ratio of 0.77 ranks in the 94th annual percentile. This means that although calls still outnumber puts on an absolute basis, puts have been bought to open relative to calls at a quicker-than-usual clip in the past two weeks.
Options buyers should beware though, as Intel's 30-day at-the-money implied volatility (IV) of 40% ranks in the 95th annual percentile, meaning near-term options are pricing in higher-than-usual volatility expectations at the moment. What's more, its 30-day IV skew of 18.8% registers in the 96th percentile of its 12-month range, suggesting puts are more expensive than their call counterparts, from a volatility perspective.