MSFT is hanging right above the Dec 5th swing point of $26.26 which had 68M shares. It will likely test that tomorrow. If you are bullish you want the test to be on lighter volume and close above 26.26. If it closes under it on higher volume; expect lower prices to come and the 26.26 support will turn into resistance.
The daily pivot is 26.60 which has a 70-80% chance of being hit (probably at the open); R1= 26.73, S1 = 26.40, and S2= 26.27.
In other words, I am all about lowering cost basis right now. I have liked MSFT and INTC for the past month plus because they have been stagnant. I am grabbing nice weekly premiums and am able to keep trading at the same strike price without the need to lower cost basis by selling a lower strike call. In this case I would have just sold another 27 call except for the earnings catalyst later in the month.
INTC also has an earnings catalyst here in a little over a week. I hold no underlying position in it now even though I have traded the weeklys for several weeks. Last week I stopped the weeklys and just sold a Jan put at 20. I know there was the earnings catalyst before expiration, but I sold it when the stock was trading at 21.5 and I wouldn't mind owning INTC at 20. I liked the downside protection there and INTC has been beat up so bad over the last year it is so incredibly undervalued. Way too much overreaction to the PC is dying news. I agree PC sales will likely decline over time, but that will take years, not days or months, and in the meantime INTC has the cash power to get into the mobile business. They have tried, and unsuccessfully so far, but they are working on it and have some potential nice deals. I will sell puts on it while the price is low.
OK, thanks. I don't really care too much near term. I do want to exit the position before earnings but if I don't then so be it. I will sell calls and wait for it to appreciate. In the meantime I can grab dividends if it is below for longer term.