Analysts, Options Traders Bet On Intel Stock Breakout – Schaeffers Research (press release)

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Semiconductor stocks last week found renewed strength thanks to major M&A buzz. One name in particular that remained hot was Dow component Intel Corporation (NASDAQ:INTC), with the shares rallying 4.2% on Friday alone. INTC stock is pointed another 0.9% higher this morning, following a big price-target hike. Analysts are hardly alone in their optimism, considering options traders have been upping the bullish ante, as well.

Jumping right in, brokerage firm Nomura boosted its Intel price target to $60 from $50, representing a level not seen since September 2000 and a 25.7% premium to Friday’s close of $47.73. If the equity’s recent trend is any indication, this target could be tackled sooner rather than later, with INTC shares up almost 37% in the past six months alone, earlier this month finding support from the 100-day moving average.

This technical strength has caught the attention of options traders, evidenced by a 10-day call/put volume ratio of 3.64 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 84th annual percentile. In other words, calls have been bought to open over puts at a faster-than-usual clip. Overall, call open interest comes in at 974,805 contracts, compared to put open interest of 647,501 contracts.

The 50 strike has seen a lot of focus from speculators. For near-term contracts, the March and April 50 calls are home to notable open interest, and data from the major options exchanges shows mostly buy-to-open activity at each. So it appears many traders foresee Intel stock breaking out above the half-century mark in the coming weeks. For what it’s worth, INTC touched a 17-year high of $50.85 back on Jan. 29.

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