SanDisk (SNDK) 2/9/10 PriceWatch Alert Down To $21.97 Break Even

Posted: Tuesday, February 09, 2010 8:41 AM EDT
By: Market Intelligence Center Staff

SanDisk (NASDAQ: SNDK) closed yesterday at $26.37. So far the stock has hit a 52-week low of $7.53 and 52-week high of $32.08. SanDisk stock has been showing support around 25.27 and resistance in the 27.55 range. Technical indicators for the stock are Bearish and S&P gives SNDK a neutral 3 STAR (out of 5) hold rating. SNDK appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Apr '10 23 covered call for a net debit in the $21.97 area. That is also the break even stock price for this trade. This covered call has a 67 day duration, provides 16.69% downside protection and a 4.69% assigned return rate for a 25.54% 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 SNDK Jan '11 5 Call and selling the Apr '10 23 call for a $17.40 debit. The trade has a 67 day life and would provide 15.05% downside protection and a 3.45% assigned return rate for a 19.00% annualized return rate (for comparison purposes only). SanDisk does not pay dividends at this time. [ATU-Seven Summits Research]