AstraZeneca (AZN) Showing Bullish Technicals With Support At $47.38

Posted: Thursday, January 19, 2012 8:02 AM EDT
By: Market Intelligence Center Staff

AstraZeneca (NYSE:AZN) closed Wednesday's favorable trading session at $48.20. 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 $47.38 and resistance in the $48.64 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 Jan '13 $45.00 covered call for a net debit in the $43.70 area. That is also the break-even stock price for this trade. This covered call has a duration of 366 days, provides 9.34% downside protection and an assigned return rate of 2.97% for an annualized return rate of 2.97% (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 $40.00 call and selling the Jan '13 $45.00 call for a total debit of $4.35. The trade has a lifespan of 366 days and would provide 7.99% downside protection and an assigned return rate of 14.94% for an annualized return rate of 15% (for comparison purposes only). AstraZeneca (AZN) has a current annual dividend yield of 3.64%. [MarketIntelligenceCenter.com]