EMC (EMC) Could Break Out Of Resistance Levels Today

Posted: Tuesday, February 09, 2010 8:57 AM EDT
By: Market Intelligence Center Staff

EMC (NYSE: EMC) ended the last trading session at $16.82. So far the stock has hit a 52-week low of $9.61 and 52-week high of $18.44. EMC stock has been showing support around 16.30 and resistance in the 17.12 range. Technical indicators for the stock are Bearish and S&P gives EMC a positive 4 STAR (out of 5) buy rating. EMC appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jul '10 17 covered call for a net debit in the $15.56 area. That is also the break even stock price for this trade. This covered call has a 159 day duration, provides 7.49% downside protection and a 9.25% assigned return rate for a 21.24% 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 EMC Jan '11 12.50 Call and selling the Jul '10 17 call for a $3.74 debit. The trade has a 159 day life and would provide 3.45% downside protection and a 20.32% assigned return rate for a 47.00% annualized return rate (for comparison purposes only). EMC does not pay dividends at this time. [ABR-Seven Summits Research]