This is a quick analysis for INTC for the coming period (October) - and a possible scenario that may pan out in favorable conditions
The reason i'm looking at INTC is because i entered long right before the last earnings. The market had a very negative reaction to INTC's earnings announcement regarding product delay - and the stock lost almost 17% next day - so we're now left with a losing position
how to repair
if you trust the stock for the long term (i do for INTC), then an easy strategy to repair the position is to average down the cost then sell Out of the Money Covered Call against the shares -and basically try to break even or even capture some small profit. so i did add to the position and you can see my final avg cost price on the chart - before i sell the CC (was looking at the $56 strike for Nov), i thought to make another round of analysis of possible price projection for next few weeks.
the chart looks bullish - after the earnings drop, INTC went thru 2 phases
1 - against a bearish sentiment, INTC held a price range and the sell-off started to reverse (interesting!)
2 - starting around Aug 11, a "buy pressure" started to build up with a positive reaction from the stock (price moving up to the "next range") - also both momentum and sentiment reversed to positive
this view shows a possibility of an incoming breakout - which would be confirmed if INTC can break the $53 level, then re-test then moves up - my next projection would be to the $57 level
The weekly chart seems to support this scenario - and if that's the case, selling the covered call would be a mistake, at least not now with a move up expected - and we should just hold the long for now and re-evaluate in couple of weeks, given how volatile the market is these days.
this is just a quick view of one possible scenario - your view may differ from mine and that's totally fine, and the actual scenario that pans out may be totally different too - so let's kep an eye on this :)
good luck!
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How do i read this chart setup
we look at the price action (top chart) and recent key S/R price levels, plus the insights from 3 key elements: momentum, sentiment and buy/sell pressure
- the calculated short-term price momentum is shown by the UTO blue/amber line
- the long term sentiment is represented by the UTO Green/Red area graph - the demand/supply pressure is expressed by the v.viewer green/red area graph - let's call these "the context"
How do i trade this chart setup
- the Basic rule: nothing can predict what happens tomorrow - but if no external catalysts interfere, it's *highly probable* that a price move with strong momentum that's in alignment with the broader context (sentiment and buy/sell pressure) would continue in the same direction (e.g., a breakout).
