Manitowoc (MTW) Gets Very Positive 5 STARs S&P Rating And Trading In Tight Support/Resistance Range

Posted: Tuesday, November 17, 2009 8:44 AM EDT

Manitowoc (NYSE: MTW) closed yesterday at $11.47. So far the stock has hit a 52-week low of $2.34 and 52-week high of $12.24. Manitowoc stock has been showing support around 10.64 and resistance in the 11.90 range. Technical indicators for the stock are Bullish and S&P gives MTW a very positive 5 STAR (out of 5) strong buy rating. MTW appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jun '10 9 covered call (MTW FU) for a net debit in the $7.97 area. That is also the break even stock price for this trade. This covered call has a 214 day duration, provides 30.51% downside protection and a 12.92% assigned return rate for a 22.04% 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 MTW Jan '11 5 Call (VMT AA) and selling the Jun '10 9 call (MTW FU) for a $3.45 debit. The trade has a 214 day life and would provide 26.33% downside protection and a 15.94% assigned return rate for a 27.00% annualized return rate (for comparison purposes only). Manitowoc has a current annual dividend yield of 0.74%. [ATU-Seven Summits Research]

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