Marvel Entertainment (MVL) Showing Bullish Technicals With Neutral 3 STARs S&P Rating

Posted: Wednesday, November 18, 2009 8:57 AM EDT

Marvel Entertainment (NYSE: MVL) closed yesterday at $52.47. So far the stock has hit a 52-week low of $22.82 and 52-week high of $52.54. Marvel Entertainment stock has been showing support around 51.90 and resistance in the 52.82 range. Technical indicators for the stock are Bullish and S&P gives MVL a neutral 3 STAR (out of 5) hold rating. MVL appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at a Jun '10 50 covered call (MVL FJ) for a net debit in the $48.87 area. That is also the break even stock price for this trade. This covered call has a 213 day duration, provides 6.86% downside protection and a 2.31% assigned return rate for a 3.96% 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 MVL Jan '11 30 Call (VTQ AF) and selling the Jun '10 50 call (MVL FJ) for an $18.80 debit. The trade has a 213 day life and would provide 6.99% downside protection and a 6.38% assigned return rate for an 11.00% annualized return rate (for comparison purposes only). Marvel Entertainment does not pay dividends at this time. [WBA-Seven Summits Research]

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