Pacific Gas and Electric (PCG) Shows Bullish Technicals With 4% Dividend Yield

Posted: Wednesday, November 11, 2009 9:13 AM EDT

Pacific Gas and Electric (NYSE: PCG) closed yesterday at $42.40. So far the stock has hit a 52-week low of $33.61 and 52-week high of $43.21. Pacific Gas and Electric stock has been showing support around 41.34 and resistance in the 43.20 range. Technical indicators for the stock are Bullish and S&P gives PCG a neutral 3 STAR (out of 5) hold rating. PCG appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Jun '10 40 covered call (PCG FH) for a net debit in the $38.60 area. That is also the break even stock price for this trade. This covered call has a 220 day duration, provides 8.96% downside protection and a 3.63% assigned return rate for a 6.02% annualized return rate (comparison purposes only). Pacific Gas and Electric has a current annual dividend yield of 4.02%. [WBA-Seven Summits Research]

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