Visa Inc. (V) PriceWatch Alert for February 8, 2010

Posted: Monday, February 08, 2010 8:10 AM EDT
By: Market Intelligence Center Staff

Visa Inc. (NYSE: V) ended the last trading session at $82.56. So far the stock has hit a 52-week low of $48.74 and 52-week high of $89.69. Visa stock has been showing support around 79.00 and resistance in the 85.64 range. Technical indicators for the stock are Bearish and S&P gives V a neutral 3 STAR (out of 5) hold rating. V appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jun '10 80 covered call for a net debit in the $75.36 area. That is also the break even stock price for this trade. This covered call has a 131 day duration, provides 8.72% downside protection and a 6.16% assigned return rate for a 17.16% 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 V Jan '11 50 Call and selling the Jun '10 80 call for a $25.90 debit. The trade has a 131 day life and would provide 8.07% downside protection and a 15.83% assigned return rate for a 44.00% annualized return rate (for comparison purposes only). Visa has a current annual dividend yield of 0.60%. [ABR-Seven Summits Research]