Alert: Ford Motor (F) Showing Bearish Price Movement With Support At 11.22

Posted: Thursday, September 02, 2010 9:05 AM EDT
By: Market Intelligence Center Staff

Ford Motor (NYSE: F) closed yesterday at $11.61. So far the stock has hit a 52-week low of $6.61 and 52-week high of $14.57. Ford Motor stock has been showing support around 11.22 and resistance in the 12.08 range. Technical indicators for the stock are Bearish and S&P gives F a neutral 3 STAR (out of 5) hold rating. F appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Mar '11 11 covered call for a net debit in the $9.86 area. That is also the break even stock price for this trade. This covered call has a 198 day duration, provides 15.07% downside protection and an 11.56% assigned return rate for a 21.31% 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 F Jan '12 5 Call and selling the Mar '11 11 call for a $5.25 debit. The trade has a 198 day life and would provide 11.71% downside protection and a 14.29% assigned return rate for a 26.00% annualized return rate (for comparison purposes only). Ford Motor does not pay dividends at this time. [THA-Seven Summits Research]