News Corp (NWS) PriceWatch Alert At $14.01 Break Even

Posted on Monday, June 23, 2008 8:07 AM

News Corp (NYSE: NWS) ended the last trading session at $16.66. So far the stock has hit a 52-week low of $16.65 and 52-week high of $24.95. News Corp stock has been showing support around 16.17 and resistance in the 17.61 range. Technical indicators for the stock are Bearish and S&P gives NWS a positive 4 STAR (out of 5) buy rating. NWS appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Jan '09 15 covered call (NWS AC) for a net debit in the $14.01 area. That is also the break even stock price for this trade. This covered call has a 208 day duration, provides 15.91% downside protection and a 7.07% assigned return rate for a 12.40% 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 NWS Jan '09 10 Call (NWS AB) and selling the Jan '09 15 call (NWS AC) for a $4.30 debit. The trade has a 208 day life and would provide 14.17% downside protection and a 16.28% assigned return rate for a 29.00% annualized return rate (for comparison purposes only). News Corp has a current annual dividend yield of 0.66%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]