Owens Illinois (OI) 2/9/10 PriceWatch Alert Support At Around $25.54

Posted: Tuesday, February 09, 2010 8:46 AM EDT
By: Market Intelligence Center Staff

Owens Illinois (NYSE: OI) closed yesterday at $26.28. So far the stock has hit a 52-week low of $9.53 and 52-week high of $39.56. Owens Illinois stock has been showing support around 25.54 and resistance in the 27.42 range. Technical indicators for the stock are Bearish and S&P gives OI a positive 4 STAR (out of 5) buy rating. OI appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Aug '10 25 covered call for a net debit in the $22.48 area. That is also the break even stock price for this trade. This covered call has a 193 day duration, provides 14.46% downside protection and an 11.21% assigned return rate for a 21.20% 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 OI Jan '11 17.50 Call and selling the Aug '10 25 call for a $6.20 debit. The trade has a 193 day life and would provide 9.82% downside protection and a 20.97% assigned return rate for a 40.00% annualized return rate (for comparison purposes only). Owens Illinois does not pay dividends at this time. [ATU-Seven Summits Research]