Corning (GLW) Jumps Over 3% On Heavy Volume

Posted: Thursday, November 12, 2009 8:45 AM EDT

Corning (NYSE: GLW) closed yesterday at $16.29. So far the stock has hit a 52-week low of $7.36 and 52-week high of $17.20. Corning stock has been showing support around 15.55 and resistance in the 16.69 range. Technical indicators for the stock are Bullish and S&P gives GLW a positive 4 STAR (out of 5) buy rating. GLW appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a May '10 16 covered call (GLW EP) for a net debit in the $14.44 area. That is also the break even stock price for this trade. This covered call has a 191 day duration, provides 11.36% downside protection and a 10.80% assigned return rate for a 20.65% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the GLW Jan '11 7.50 Call (VGC AU) and selling the May '10 16 call (GLW EP) for a $6.95 debit. The trade has a 191 day life and would provide 11.30% downside protection and a 22.30% assigned return rate for a 43.00% annualized return rate (for comparison purposes only). Corning has a current annual dividend yield of 1.27%. [THA-Seven Summits Research]

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