Focus Media (FMCN) 2/9/10 PriceWatch Alert Shows Bearish Technicals

Posted: Tuesday, February 09, 2010 8:32 AM EDT
By: Market Intelligence Center Staff

Focus Media (NASDAQ: FMCN) closed yesterday at $13.10. So far the stock has hit a 52-week low of $4.84 and 52-week high of $17.88. Focus Media stock has been showing support around 12.48 and resistance in the 14.20 range. Technical indicators for the stock are Bearish. FMCN appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '11 10 covered call for a net debit in the $8.90 area. That is also the break even stock price for this trade. This covered call has a 347 day duration, provides 32.06% downside protection and a 12.36% assigned return rate for a 13.00% 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 FMCN Jan '11 5 Call and selling the Jan '11 10 call for a $4.40 debit. The trade has a 347 day life and would provide 28.24% downside protection and a 13.64% assigned return rate for a 14.00% annualized return rate (for comparison purposes only). Focus Media does not pay dividends at this time. [ATU-Seven Summits Research]