NVIDIA (NVDA) 12/22/09 PriceWatch Alert Support Down To $16.68

Posted: Tuesday, December 22, 2009 8:04 AM EDT
By: Market Intelligence Center Staff

NVIDIA (NASDAQ: NVDA) closed yesterday at $17.42. So far the stock has hit a 52-week low of $7.08 and 52-week high of $17.49. NVIDIA stock has been showing support around 16.68 and resistance in the 17.86 range. Technical indicators for the stock are Bullish and S&P gives NVDA a neutral 3 STAR (out of 5) hold rating. NVDA appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jun '10 16 covered call for a net debit in the $14.44 area. That is also the break even stock price for this trade. This covered call has a 179 day duration, provides 17.11% downside protection and a 10.80% assigned return rate for a 22.03% 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 NVDA Jan '11 7.50 Call and selling the Jun '10 16 call for a $7.32 debit. The trade has a 179 day life and would provide 14.93% downside protection and a 16.12% assigned return rate for a 33.00% annualized return rate (for comparison purposes only). NVIDIA does not pay dividends at this time. [ATU-Seven Summits Research]