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Large Bull Looks for Intel to Rebound

By Mike Yamamoto, managing editor of OptionMonster

NEW YORK -- A large trader is looking for Intel (INTC) to rebound as it tries to hold onto a key technical level.

The chipmaker fell 0.52% to $21.92 on Friday, the second consecutive close below its 200-day moving average. Intel gapped down from above $24 on July 18 after missing second-quarter estimates on weak PC sales, and shares have continued to trend lower since.

OptionMonster's tracking systems detected the purchase of 13,000 September 25 calls for 3 cents and the sale of 13,000 September 19 puts for 2 cents on Friday. So the trader is paying a penny to ride a rally through the long calls, but the short puts mean that he or she would be on the hook to buy shares around $19 if they fall below that level by expiration in mid-September.

Total option volume in Intel was nearly 5 times its daily average for the last month. Overall calls outnumber puts by 5.5 to 1.

Yamamoto has no positions in INTC.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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