Ecolab (ECL) Trading In Tight Support/Resistance Range

Posted: Thursday, November 19, 2009 9:23 AM EDT

Ecolab (NYSE: ECL) closed yesterday at $45.96. So far the stock has hit a 52-week low of $29.27 and 52-week high of $47.88. Ecolab stock has been showing support around 45.39 and resistance in the 46.69 range. Technical indicators for the stock are Bullish and S&P gives ECL a positive 4 STAR (out of 5) buy rating. ECL appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Jan '10 45 covered call (ECL AI) for a net debit in the $44.01 area. That is also the break even stock price for this trade. This covered call has a 58 day duration, provides 4.24% downside protection and a 2.25% assigned return rate for a 14.16% annualized return rate (comparison purposes only). Ecolab has a current annual dividend yield of 1.21%. [THA-Seven Summits Research]

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