iShares Russell 2000 Index Fund (IWM) 7/30/10 PriceWatch Alert Shows Bullish Technicals
Posted: Friday, July 30, 2010 8:46 AM EDT
By: Market Intelligence Center Staff
iShares Russell 2000 Index Fund (PACF: IWM) closed yesterday at $64.98. So far IWM has hit a 52-week low of $54.68 and 52-week high of $74.66. IWM has been showing support around 62.93 and resistance in the 67.01 range. Technical indicators are Bullish. IWM appears on the Investors Observer Select ETF and HOLDR list. For a hedged play on this stock, look at a Sep '10 64 covered call for a net debit in the $61.52 area. That is also the break even stock price for this trade. This covered call has a 50 day duration, provides 5.32% downside protection and a 4.03% assigned return rate for a 29.43% 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 IWM Jan '12 35 Call and selling the Sep '10 64 call for a $27.83 debit. The trade has a 50 day life and would provide 3.31% downside protection and a 4.20% assigned return rate for a 31.00% annualized return rate (for comparison purposes only). [FBB-Seven Summits Research]
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