United States Oil Fund, LP (USO) 3/15/10 PriceWatch Alert With Support Around $38.64
Posted: Monday, March 15, 2010 8:04 AM EDT
By: Market Intelligence Center Staff
United States Oil Fund, LP (PACF: USO) ended the last trading session at $39.51. So far USO has hit a 52-week low of $26.28 and 52-week high of $41.92. USO has been showing support around 38.64 and resistance in the 40.68 range. Technical indicators are Bullish. USO appears on the Investors Observer Select ETF and HOLDR list. For a hedged play on this stock, look at a Jul '10 39 covered call for a net debit in the $36.51 area. That is also the break even stock price for this trade. This covered call has a 124 day duration, provides 7.59% downside protection and a 6.82% assigned return rate for a 20.08% 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 USO Jan '11 29 Call and selling the Jul '10 39 call for an $8.60 debit. The trade has a 124 day life and would provide 4.83% downside protection and a 16.28% assigned return rate for a 48.00% annualized return rate (for comparison purposes only). [ABR-Seven Summits Research]
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