Corning (GLW) 12/4/09 PriceWatch Alert Targets 11.09% Downside Protection

Posted: Friday, December 04, 2009 8:36 AM EDT

Corning (NYSE: GLW) closed yesterday at $17.59. So far the stock has hit a 52-week low of $7.90 and 52-week high of $17.89. Corning stock has been showing support around 17.26 and resistance in the 18.06 range. Technical indicators for the stock are Bullish and S&P gives GLW a positive 4 STAR (out of 5) buy rating. GLW appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a May '10 17 covered call (GLW EQ) for a net debit in the $15.64 area. That is also the break even stock price for this trade. This covered call has a 169 day duration, provides 11.09% downside protection and an 8.70% assigned return rate for an 18.78% 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 GLW Jan '11 7.50 Call (VGC AU) and selling the May '10 17 call (GLW EQ) for an $8.15 debit. The trade has a 169 day life and would provide 11.03% downside protection and a 16.56% assigned return rate for a 36.00% annualized return rate (for comparison purposes only). Corning has a current annual dividend yield of 1.16%. [FBB-Seven Summits Research]

Click Symbol For More News On: (GLW)