Vodafone Group (VOD) 2/9/10 PriceWatch Alert With Support Around $21.56

Posted: Tuesday, February 09, 2010 8:46 AM EDT
By: Market Intelligence Center Staff

Vodafone Group (NASDAQ: VOD) closed yesterday at $21.77. So far the stock has hit a 52-week low of $15.46 and 52-week high of $24.04. Vodafone Group stock has been showing support around 21.56 and resistance in the 22.10 range. Technical indicators for the stock are Bearish and S&P gives VOD a neutral 3 STAR (out of 5) hold rating. VOD appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '11 20 covered call for a net debit in the $18.97 area. That is also the break even stock price for this trade. This covered call has a 347 day duration, provides 12.86% downside protection and a 5.43% assigned return rate for a 5.71% 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 VOD Jan '11 17.50 Call and selling the Jan '11 20 call for a $2.00 debit. The trade has a 347 day life and would provide 10.43% downside protection and a 25.00% assigned return rate for a 26.00% annualized return rate (for comparison purposes only). Vodafone Group has a current annual dividend yield of 5.77%. [ATU-Seven Summits Research]