JDS Uniphase (JDSU) 2/9/10 PriceWatch Alert Shows Bullish Technicals

Posted: Tuesday, February 09, 2010 8:45 AM EDT
By: Market Intelligence Center Staff

JDS Uniphase (NASDAQ: JDSU) closed yesterday at $8.13. So far the stock has hit a 52-week low of $2.21 and 52-week high of $9.13. JDS Uniphase stock has been showing support around 7.40 and resistance in the 8.70 range. Technical indicators for the stock are Bullish and S&P gives JDSU a neutral 3 STAR (out of 5) hold rating. JDSU appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '11 7.50 covered call for a net debit in the $6.38 area. That is also the break even stock price for this trade. This covered call has a 347 day duration, provides 21.53% downside protection and a 17.55% assigned return rate for an 18.47% 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 JDSU Jan '11 5 Call and selling the Jan '11 7.50 call for a $1.80 debit. The trade has a 347 day life and would provide 16.36% downside protection and a 38.89% assigned return rate for a 41.00% annualized return rate (for comparison purposes only). JDS Uniphase does not pay dividends at this time. [ATU-Seven Summits Research]