AstraZeneca (AZN) Showing Bullish Technicals With 3.58% Dividend Yield

Posted: Friday, January 06, 2012 7:45 AM EDT
By: Market Intelligence Center Staff

AstraZeneca (NYSE:AZN) closed Thursday's wandering trading session at $46.85. In the past year, the stock has hit a 52-week low of $40.89 and 52-week high of $52.54. AstraZeneca (AZN) stock has been showing support around $46.08 and resistance in the $47.32 range. Technical indicators for the stock are Bullish and S&P gives AstraZeneca (AZN) a neutral 3 STARS (out of 5) hold rating. For a hedged play on AstraZeneca (AZN), look at the Jul '12 $45.00 covered call for a net debit in the $43.75 area. That is also the break-even stock price for this trade. This covered call has a duration of 197 days, provides 6.62% downside protection and an assigned return rate of 2.86% for an annualized return rate of 5.29% (for comparison purposes only). A lower-cost hedged play for AstraZeneca (AZN) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the AstraZeneca (AZN) Jan '13 $35.00 call and selling the Jul '12 $45.00 call for a total debit of $9.30. The trade has a lifespan of 197 days and would provide 5.44% downside protection and an assigned return rate of 7.53% for an annualized return rate of 14% (for comparison purposes only). AstraZeneca (AZN) has a current annual dividend yield of 3.58%. [MarketIntelligenceCenter.com]