Replies to post #9509 on Intel Corp (INTC)

[SemiconEng]

News Quote Chart For AMD

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Pessimism has been on the rise toward the semiconductor sector as of late, and Advanced Micro Devices has been unable to remove itself from this bearish tide. Options investors piled on the puts at the security's March 14 strike today, sending 4,212 contracts across the tape on open interest of 5,635. The equity's Schaeffer's put/call open interest ratio also spiked to 0.69 on Friday following February option expiration. Not only is this reading higher than 72.6 percent of all those taken over the past year, but it demonstrates a growing preference for puts over calls. Even Wall Street has jumped in on the act, as 17 of the 24 analysts following AMD rate the shares a "hold" or worse.

This level of pessimism is somewhat surprising given that AMD has outperformed not only its peers on the PHLX Semiconductor Index since October 2002, but has also bested the broader SPX over that same time period. The recent surge in media pessimism toward the semiconductor industry has naturally led the shares lower in recent weeks, but technical support lies just beneath the shares. The 14 level is the site of not only long-term support, but also the accumulation of 10,469 put contracts in the March and April series could lend potential options-related support to the stock. A strong rebound off this level could force bearish sentiment to unwind and boost the shares even higher.