PetSmart (PETM) 11/23/09 PriceWatch Alert Shows Bullish Technicals

Posted: Monday, November 23, 2009 8:26 AM EDT

PetSmart (NasdaqNM: PETM) closed yesterday at $25.66. So far the stock has hit a 52-week low of $14.39 and 52-week high of $26.85. PetSmart stock has been showing support around 24.87 and resistance in the 26.63 range. Technical indicators for the stock are Bullish and S&P gives PETM a neutral 3 STAR (out of 5) hold rating. PETM appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Jan '10 25 covered call (QPT AE) for a net debit in the $24.11 area. That is also the break even stock price for this trade. This covered call has a 54 day duration, provides 6.04% downside protection and a 3.69% assigned return rate for a 24.95% annualized return rate (comparison purposes only). PetSmart has a current annual dividend yield of 1.52%. [ABR-Seven Summits Research]

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