Market Vectors - Gold Miners ETF (GDX) 2/9/10 PriceWatch Alert Bearish Price Movement
Posted: Tuesday, February 09, 2010 8:25 AM EDT
By: Market Intelligence Center Staff
Market Vectors - Gold Miners ETF (PACF: GDX) closed yesterday at $40.78. So far GDX has hit a 52-week low of $29.25 and 52-week high of $55.40. GDX has been showing support around 39.61 and resistance in the 43.09 range. Technical indicators are Bearish. GDX appears on the Investors Observer Select ETF and HOLDR list. For a hedged play on this stock, look at a Jun '10 40 covered call for a net debit in the $36.08 area. That is also the break even stock price for this trade. This covered call has a 130 day duration, provides 11.53% downside protection and a 10.86% assigned return rate for a 30.50% 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 GDX Jan '11 25 Call and selling the Jun '10 40 call for a $12.45 debit. The trade has a 130 day life and would provide 8.17% downside protection and a 20.48% assigned return rate for a 58.00% annualized return rate (for comparison purposes only). [ATU-Seven Summits Research]
CLICK HERE: FREE Market Vectors Gold Miners (GDX) Stock ReportSee what our analysts have uncovered about Market Vectors Gold Miners (GDX).