Schaeffer's Midday Options Update Features Intel.

CINCINNATI -- Today's Schaeffer's Midday Options Update features Intel (NASDAQ:INTC). The Midday Options Update contains a brief commentary on the day's most notable activity and a table listing the most-active calls and puts for the day. The Midday Options Update is published every day at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research.

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Options Update: Could Intel's Short Run Be Over?

The major market indices are trading flat to lower as we head into the latter half of the session today. It seems that many on the Street have shaken off North Korea's decision to carry out a nuclear test, but a downgrade for MasterCard (MA) and a rise in oil prices is placing a cap on today's upside potential. Checking in with oil, crude futures are on the march higher following expectations that OPEC will confirm a production cut of one million barrels per day. News reports surfacing this morning cite unnamed OPEC sources as saying that the group has agreed to a production cut.

Most-Active Options Update

At 1:26 p.m. Eastern Time, the Dow Jones Industrial Average (DJIA - 11,854.1) is currently up 0.03 percent and the S&P 500 Index (SPX - 1,351.30) has added 0.13 percent. Meanwhile, the Nasdaq Composite (COMP - 2,313.5) has advanced 0.59 percent. At 1:27 p.m. Eastern Time, 2,004,875 calls have changed hands compared to 1,451,418 puts, equaling a single-day put/call volume ratio of 0.72. The CBOE's equity put/call volume ratio stands at 0.75, while the ISE's ratio comes in at 0.75.

Intel

For today's focus stock, we turn our attention to semiconductor bellwether Intel (NASDAQ:INTC). The stock has jumped onto our most-active options list today as more than 10,000 calls have crossed the tape at its October 20 strike. Meanwhile, another roughly 20,000 puts have changed hands at INTC's October 20 put. Both strikes are home to peak open interest for puts and calls in the October series of options, making this a rather important strike for INTC. The shares are currently hovering just below the 21 level, and if they do not make a move soon, they could be pinned to the 20 level as we head into October option expiration.

Turning a closer eye to the stock's technical performance, INTC has managed a bit of a recovery in recent sessions. Since setting a near-term low of 16.75 in mid-June, the security has gained some 23 percent. However, INTC has once again run into overhead resistance at its declining 50-day moving average. This trendline has not only capped the shares' advance during the past three sessions, but it has helped usher INTC more than 21 percent lower since January. What's more, the 21 level has long been a sticking point for the security.

Sentiment Rundown for INTC:

* Percent of analysts tracked by Zacks who rate the stock with a "buy": 69%

* Number of analysts tracked by Zacks: 26

* Short interest as a percent of float: 1.24%

* Short-interest ratio: 1.08

* Schaeffer's put/call open interest ratio (SOIR): 0.50

* SOIR percent rank: 50%

* Schaeffer's Equity Scorecard: 6.0

Looking over the sentiment indicators above, things do not look good for a continued INTC run higher. With staunch technical resistance lingering overhead, I really don't see where the shares are going to garner the strength for a continued run higher. Short interest is practically nonexistent, and the stock is in danger of downgrades, with 18 of the 26 analysts covering the shares doling out "buy" or better ratings. Even options players don't offer up much hope at this point. With a SOIR of 0.50 and a ranking in the middle of its annual range, complacency is king in the options pits for INTC. These factors do not bode well for the shares from a contrarian point of view.

That said, there is a wealth of put open interest at the 20 strike in the October series of options, which could lend a supportive hand. I'd look for INTC to be flat to lower by this time next week. Watch for a break below potential support at the 20 level, as this could signal another downleg for the shares. As always, thanks for reading and good luck with your trading.

Click here to see a Daily chart of INTC Since January 2006 with 50-day: http://www.schaeffersresearch.com/wire?ID=17512 .

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About Schaeffer's Investment Research (www.SchaeffersResearch.com)

Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com , is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method .