This morning, chipmaker Intersil Corp. was downgraded from neutral to sell at Goldman Sachs over valuation and inventory concerns. The broker noted, We believe that datapoints will soon emerge pointing to an excess inventory build in PC power management integrated circuits, but added that the stock is still a great fundamental story characterized by solid execution and above-market growth.

As investors react to the news, shares of Intersil are down 3.6% this morning. The stock has stair-stepped lower since last Thursday, breaching the support of its 10-day and 20-day moving averages, though it did close atop its 10-week trendline last Friday.

ISIL has gained about 28% in value during 2007, but option traders are still reluctant of the stock's prospects. Its Schaeffer's put/call open interest ratio is 2.57, just 4 percentage points away from an annual high. Meanwhile, the stock is vulnerable to more future downgrades, with Zacks reporting 9 strong buy and 2 buy ratings from the 18 analysts who currently follow the stock.