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Cerner (CERN) Showing Resistance Near $61.52

MarketIntelligenceCenter.com's patented algorithms have identified an attractive covered-call trade on Cerner (CERN). Look at the Sep 21, 2018 $57.50 covered call for a net debit in the $55.07 area.

This trade has a duration of 127 days. The break-even point of this trade is the same as the net debit, which gives this trade 8.17% downside protection. If the stock closes at or above $57.50 at expiration this trade will return 4.41% or 12.68% annually (for comparison purposes only).

If you're interested in a lower-cost hedged trade on Cerner, consider buying the Jan 18, 2019 $45 call and selling the Sep 21, 2018 $57.50 call for a net debit of $11.65.  

This hedged trade uses a longer-term bought call instead of the long stock position in a traditional covered call. The hedged trade lasts 127 days and would provide 5.53% downside protection. If Cerner is at or above $57.50 when the market closes in Sep 21, 2018, this trade will make a full return of 7.29% of the initial capital at risk for an annualized return rate of 20.96% (for comparison purposes only).

CERN closed May 16, 2018's trading session at $59.97. In the past year, the stock has hit a 52-week low of $52.05 and 52-week high of $73.86. Cerner stock has been showing support around $57.44 and resistance in the $61.52 range. Technical indicators for the stock are bearish and S&P gives CERN 4 STARS (out of 5) buy ranking.