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Why MCHP Is an Excellent Covered Call Candidate Right Now Strong · 78/100
Microchip Technology Inc (Technology) · $77.34 ·
Analysis generated Oct 30, 2026 ·
Data as of market close Oct 30
Quick Take
MCHP is trading at $77.34 with RSI at 50 (neutral territory). Options IV is at 52% — 39% below its 30-day average of 86%. Neither RSI nor IV strongly favor selling calls right now. Consider waiting for better conditions or using a different strategy.
Technical Signals
RSI (14)
50
IV Today
52.1%
IV vs 30d Avg
-39%
MACD
bullish
ADX
13
MFI
66
The Setup
MCHP Covered Call
LONG STOCK
100 shares @ $77.34
SHORT CALL
$84 Dec '26 · $3.48/sh
Net Cost
$7,386
Max Profit
+$1,014
Break-even
$73.86
Projected P&L at Target
+$1,014
(13.7%)
P&L at Expiry
P&L Scenarios
What happens at different MCHP prices by expiry:
| MCHP Price | Today | Nov 16 | Dec 2 | Dec 18 (exp) |
|---|---|---|---|---|
| $62 (-20%) | -$1,232 | -$1,210 | -$1,200 | -$1,199 |
| $66 (-15%) | -$881 | -$841 | -$816 | -$812 |
| $70 (-10%) | -$554 | -$493 | -$440 | -$425 |
| $73 (-5%) | -$259 | -$175 | -$87 | -$39 |
| $76 (-2%) | -$99 | -$2 | +$109 | +$193 |
| $77 (0%) ← now | +$0 | +$105 | +$230 | +$348 |
| $79 (+2%) | +$93 | +$205 | +$342 | +$503 |
| $81 (+5%) | +$221 | +$340 | +$491 | +$735 |
| $84 (+9%) ← target | +$357 | +$480 | +$640 | +$1,014 |
| $85 (+10%) | +$403 | +$528 | +$687 | +$1,014 |
| $89 (+15%) | +$550 | +$671 | +$822 | +$1,014 |
| $93 (+20%) | +$664 | +$776 | +$906 | +$1,014 |
Why This Strategy, Why Now
- RSI at 50 — neutral-bullish
- IV -39% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 13 — range-bound, perfect for selling calls
- No squeeze — no imminent breakout
Key Risks
MCHP has bullish momentum (MACD). If a positive catalyst emerges (earnings beat, product launch), the stock could gap past your strike. Consider rolling the call up if MCHP approaches the strike before expiry.