Intel's Sharp Intraday Downturn: Trump Backing and Sector Rally Clash with Technical Headwinds

Summary
• Intel (INTC) plunges 2.25% to $44.525, trading below its 52-week high of $45.73
• Trump's endorsement and $8.9B CHIPS Act stake drive recent 100% rally
• Sector peers like AMD surge 2.87%, contrasting INTC's intraday weakness
• Options chain shows heavy put buying at $40 strike ahead of 1/16 expiration

Intel's volatile intraday session reflects a tug-of-war between political tailwinds and technical resistance. Despite Trump's recent bullish comments and a strategic partnership with NVIDIA, the stock faces immediate pressure from overbought indicators and a crowded $40-45 price corridor. With sector leaders like AMD surging, the question remains whether INTC's government-backed turnaround can sustain momentum.

Political Tailwinds Clash with Overbought Technicals
Intel's intraday decline stems from a collision of bullish fundamentals and bearish technical indicators. While Trump's endorsement and the $8.9B CHIPS Act investment have driven a 100% rally since August, the stock now trades at 513x forward earnings and 82.08 RSI (overbought territory). The $45.45 intraday high represents a 52-week high just 30 cents below the 200-day MA at $27.96, creating a 'wall of worry' as short-term traders lock in profits. Meanwhile, the $40 strike price has attracted heavy put buying (8,564 contracts) ahead of 1/16 expiration, signaling caution about near-term volatility.

Semiconductor Sector Mixed as AMD Outperforms
The semiconductor sector shows divergent momentum, with Advanced Micro Devices (AMD) surging 2.87% while Intel lags. This reflects AMD's stronger technical position (RSI at 65 vs INTC's 82) and clearer product roadmap. The sector's $110B global equipment market expansion provides tailwinds, but INTC faces unique challenges: its 18A manufacturing process rollout has created short-term supply constraints, while competitors like ASML and Broadcom show more consistent earnings visibility.

Bearish Options Play and ETF Positioning in Overbought Market
• 200-day MA: $27.96 (far below current price)
• RSI: 82.08 (overbought)
• MACD: 1.13 (bullish) vs Signal Line: 0.34
• Bollinger Bands: $33.21 (lower) to $43.32 (upper)
• 52-week range: $17.67-$45.73

INTC's technical profile suggests imminent correction after a 100% rally. The GraniteShares 2x Long INTC Daily ETF (INTW) at -4.71% and Direxion Daily INTC Bull 2X ETF (LINT) at -5.08% show leveraged ETF weakness. For options, two contracts stand out:

• INTC20260116P40
- Put option, $40 strike, 1/16 expiration
- IV: 61.73% (mid-range)
- Leverage: 403.23%
- Delta: -0.070
- Theta: -0.016
- Gamma: 0.042
- Turnover: $108,407
- IV indicates moderate volatility, leverage suggests strong downside potential, and high turnover ensures liquidity. If INTC breaks below $40, this put could gain 20%+ on a 5% price drop.

• INTC20260116C44
- Call option, $44 strike, 1/16 expiration
- IV: 57.73%
- Leverage: 31.91%
- Delta: 0.564
- Theta: -0.316
- Gamma: 0.131
- Turnover: $1.7M
- This call offers balanced exposure with 56% delta and 13% gamma, ideal for a sideways-to-bullish scenario. If INTC holds above $44, the 57% IV provides upside potential.

Position sizing should reflect the 82 RSI overbought warning. Aggressive traders might consider a 70/30 put/call ratio, while conservative investors should watch the $40 support level. If INTC breaks below $40, the INTC20260116P40 put becomes a high-probability trade.

Backtest Intel Stock Performance
After experiencing a -2% intraday plunge from 2022 to the present, Intel's (INTC) stock has shown mixed short-term performance. The backtest results indicate a slightly positive return over 3 days (0.26%), a slightly higher return over 10 days (0.75%), and a moderate return over 30 days (1.59%). The maximum return during the backtest period was 2.92%, which occurred on day 59 after the plunge. Overall, the performance following the intraday plunge has been modest, with a general upward trend but limited gains.

Critical Support Levels to Watch as Volatility Peaks
Intel's immediate fate hinges on its ability to hold above $40, a level with both psychological and technical significance. The 6,564 contracts at the $40 strike indicate heavy bearish positioning, while the 82 RSI suggests overbought conditions. With AMD surging 2.87% and the semiconductor sector showing mixed momentum, INTC faces a pivotal test. Traders should monitor the $40-45 corridor, where volume and open interest are concentrated. If the $40 level breaks, the INTC20260116P40 put offers a high-leverage bearish play. Conversely, a rebound above $45.45 could reignite the 100% rally narrative. Position sizing should reflect the 513x forward P/E and 1.86% turnover rate, suggesting limited short-term liquidity.