OSI Pharmaceuticals (OSIP) Makes Investors Observer Momentum Plays List

Posted: Tuesday, February 09, 2010 8:16 AM EDT
By: Market Intelligence Center Staff

OSI Pharmaceuticals (NASDAQ: OSIP) closed yesterday at $34.17. So far the stock has hit a 52-week low of $27.01 and 52-week high of $42.44. OSI Pharmaceuticals stock has been showing support around 33.71 and resistance in the 34.87 range. Technical indicators for the stock are Neutral and S&P gives OSIP a neutral 3 STAR (out of 5) hold rating. OSIP appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at an Apr '10 32.50 covered call for a net debit in the $31.27 area. That is also the break even stock price for this trade. This covered call has a 67 day duration, provides 8.49% downside protection and a 3.93% assigned return rate for a 21.43% 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 OSIP Jan '11 17.50 Call and selling the Apr '10 32.50 call for a $14.60 debit. The trade has a 67 day life and would provide 6.06% downside protection and a 2.74% assigned return rate for a 15.00% annualized return rate (for comparison purposes only). OSI Pharmaceuticals does not pay dividends at this time. [ATU-Seven Summits Research]