Walt Disney (DIS) PriceWatch Alert Support Down To $32.77

Posted on Friday, June 13, 2008 8:07 AM

Walt Disney (NYSE: DIS) closed yesterday at $33.24. So far the stock has hit a 52-week low of $26.30 and 52-week high of $35.69. Walt Disney stock has been showing support around 32.77 and resistance in the 33.93 range. Technical indicators for the stock are Bullish and S&P gives DIS a very positive 5 STAR (out of 5) strong buy rating. DIS appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at an Oct '08 35 covered call (DIS JG) for a net debit in the $31.84 area. That is also the break even stock price for this trade. This covered call has a 127 day duration, provides 4.21% downside protection and a 9.92% assigned return rate for a 28.52% 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 DIS Jan '09 30 Call (DIS AF) and selling the Oct '08 35 call (DIS JG) for a $3.70 debit. The trade has a 127 day life and would provide no downside protection and a 35.14% assigned return rate for a 101.00% annualized return rate (for comparison purposes only). Walt Disney has a current annual dividend yield of 1.10%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]