Petrochina (PTR) Showing Bearish Technicals With Resistance At 110.97

Posted: Tuesday, August 31, 2010 9:02 AM EDT
By: Market Intelligence Center Staff

Petrochina (NYSE: PTR) closed yesterday at $108.86. So far the stock has hit a 52-week low of $99.02 and 52-week high of $135.92. Petrochina stock has been showing support around 107.77 and resistance in the 110.97 range. Technical indicators for the stock are Bearish and S&P gives PTR a very positive 5 STAR (out of 5) strong buy rating. PTR appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Dec '10 105 covered call for a net debit in the $101.06 area. That is also the break even stock price for this trade. This covered call has a 109 day duration, provides 7.17% downside protection and a 3.90% assigned return rate for a 13.06% 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 PTR Jan '12 60 Call and selling the Dec '10 105 call for a $42.70 debit. The trade has a 109 day life and would provide 5.66% downside protection and a 5.39% assigned return rate for an 18.00% annualized return rate (for comparison purposes only). Petrochina has a current annual dividend yield of 3.05%. [ATU-Seven Summits Research]