CBS (CBS) 2/9/10 PriceWatch Alert Support At Around $12.22

Posted: Tuesday, February 09, 2010 8:36 AM EDT
By: Market Intelligence Center Staff

CBS (NYSE: CBS) closed yesterday at $12.72. So far the stock has hit a 52-week low of $3.06 and 52-week high of $14.56. CBS stock has been showing support around 12.22 and resistance in the 13.24 range. Technical indicators for the stock are Bearish and S&P gives CBS a positive 4 STAR (out of 5) buy rating. CBS appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Sep '10 12 covered call for a net debit in the $10.62 area. That is also the break even stock price for this trade. This covered call has a 221 day duration, provides 16.51% downside protection and a 12.99% assigned return rate for a 21.46% 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 CBS Jan '11 7.50 Call and selling the Sep '10 12 call for a $3.55 debit. The trade has a 221 day life and would provide 13.13% downside protection and a 26.76% assigned return rate for a 44.00% annualized return rate (for comparison purposes only). CBS has a current annual dividend yield of 1.53%. [ATU-Seven Summits Research]