Jabil Circuit (JBL) PriceWatch Alert for December 22, 2009

Posted: Tuesday, December 22, 2009 8:39 AM EDT
By: Market Intelligence Center Staff

Jabil Circuit (NYSE: JBL) closed yesterday at $15.02. So far the stock has hit a 52-week low of $3.10 and 52-week high of $15.45. Jabil Circuit stock has been showing support around 14.72 and resistance in the 15.48 range. Technical indicators for the stock are Bullish and S&P gives JBL a positive 4 STAR (out of 5) buy rating. JBL appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jun '10 12.50 covered call for a net debit in the $11.62 area. That is also the break even stock price for this trade. This covered call has a 179 day duration, provides 22.64% downside protection and a 7.57% assigned return rate for a 15.44% 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 JBL Jan '11 5 Call and selling the Jun '10 12.50 call for a $6.80 debit. The trade has a 179 day life and would provide 21.44% downside protection and a 10.29% assigned return rate for a 21.00% annualized return rate (for comparison purposes only). Jabil Circuit has a current annual dividend yield of 1.94%. [ATU-Seven Summits Research]