US Steel (X) 2/9/10 PriceWatch Alert Support At Around $42.28

Posted: Tuesday, February 09, 2010 8:33 AM EDT
By: Market Intelligence Center Staff

US Steel (NYSE: X) closed yesterday at $44.09. So far the stock has hit a 52-week low of $16.66 and 52-week high of $66.45. US Steel stock has been showing support around 42.28 and resistance in the 46.80 range. Technical indicators for the stock are Bearish and S&P gives X a weak 2 STAR (out of 5) sell rating. X appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Apr '10 41 covered call for a net debit in the $38.19 area. That is also the break even stock price for this trade. This covered call has a 67 day duration, provides 13.38% downside protection and a 7.36% assigned return rate for a 40.08% 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 X Jan '11 22.50 Call and selling the Apr '10 41 call for a $17.05 debit. The trade has a 67 day life and would provide 10.30% downside protection and an 8.50% assigned return rate for a 46.00% annualized return rate (for comparison purposes only). US Steel has a current annual dividend yield of 0.45%. [ATU-Seven Summits Research]