Juniper Networks (JNPR) Picks Up Over 3% On Heavy Trading

Posted: Tuesday, November 24, 2009 8:32 AM EDT

Juniper Networks (NYSE: JNPR) closed yesterday at $26.07. So far the stock has hit a 52-week low of $12.43 and 52-week high of $28.74. Juniper Networks stock has been showing support around 25.23 and resistance in the 26.53 range. Technical indicators for the stock are Bullish and S&P gives JNPR a neutral 3 STAR (out of 5) hold rating. JNPR appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Apr '10 25 covered call (JUX DE) for a net debit in the $22.82 area. That is also the break even stock price for this trade. This covered call has a 144 day duration, provides 12.47% downside protection and a 9.55% assigned return rate for a 24.21% 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 JNPR Jan '11 10 Call (VWQ AL) and selling the Apr '10 25 call (JUX DE) for a $13.05 debit. The trade has a 144 day life and would provide 11.58% downside protection and a 14.94% assigned return rate for a 38.00% annualized return rate (for comparison purposes only). Juniper Networks does not pay dividends at this time. [ATU-Seven Summits Research]

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