Morgan Stanley Prices In Major Intel Stock Rally

A number of options traders have sold to open Intel calls

Feb 22, 2019 at 10:02 AM
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Intel Corporation (NASDAQ:INTC) is trading up 2.6% this morning at $52.76, following an upgrade at Morgan Stanley to "overweight" from "equal weight." The brokerage firm also moved its price target all the way up to $64 from $55 -- representing 24.5% expected upside from yesterday's close and multi-year high territory -- saying the company's recent CEO change could result in more financial discipline. At the same time, the analysts said they remain cautious on the semiconductor space as a whole.

This bullish attention comes after INTC shares recently broke through long-term resistance at their 200-day moving average, now testing the site of their July bear gap. Some options traders seem to be betting on a ceiling for the security, however. That is, one of the top open interest positions is the June 55 call, and data points to notable sell-to-open activity, meaning traders expect Intel to hold below $55 through the first half of 2019.

No matter which way you're looking to bet on Intel, it seems to be a good time for options buyers to target near-term contracts, based on the stock's Schaeffer's Volatility Index (SVI) of 22%. This reading's 10th annual percentile rank tells us that short-term volatility expectations have rarely been so muted on the chipmaker.

Outside the options pits, analyst sentiment remains mixed, with the slim majority of the 29 covering brokerages handing out "hold" or worse recommendations. Similarly, the average 12-month price target of $52.96 signals no expected upside from this group.

 

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