Reliance Steel and Aluminum (RS) 11/12/09 PriceWatch Alert Targets 35.51% Return

Posted: Thursday, November 12, 2009 8:22 AM EDT

Reliance Steel and Aluminum (NYSE: RS) closed yesterday at $40.07. So far the stock has hit a 52-week low of $12.58 and 52-week high of $44.96. Reliance Steel and Aluminum stock has been showing support around 39.32 and resistance in the 41.18 range. Technical indicators for the stock are Bullish and S&P gives RS a positive 4 STAR (out of 5) buy rating. RS appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Mar '10 40 covered call (RS CH) for a net debit in the $35.57 area. That is also the break even stock price for this trade. This covered call has a 128 day duration, provides 11.23% downside protection and a 12.45% assigned return rate for a 35.51% annualized return rate (comparison purposes only). Reliance Steel and Aluminum has a current annual dividend yield of 1.00%. [THA-Seven Summits Research]

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