Ross Stores Inc. (ROST) PriceWatch Alert Up To 13.91% Downside Protection

Posted on Friday, July 11, 2008 8:07 AM

Ross Stores Inc. (NasdaqNM: ROST) closed yesterday at $37.39. So far the stock has hit a 52-week low of $21.23 and 52-week high of $39.23. Ross Stores stock has been showing support around 35.64 and resistance in the 40.10 range. Technical indicators for the stock are Bullish and S&P gives ROST a positive 4 STAR (out of 5) buy rating. ROST appears on the Investors Observer Stocks In The News list. ROST fell $0.09 (-0.24%) Thursday after announcing its June same-store sales rose 8%. Analysts predicted same-store sales growth of 2.9%. The company also lifted its second-quarter outlook, saying it now expects earnings to range from 51 cents to 53 cents, up from its prior range of 43 cents to 47 cents. For a hedged play on this stock, look at a Nov '08 35 covered call (REQ KG) for a net debit in the $32.19 area. That is also the break even stock price for this trade. This covered call has a 134 day duration, provides 13.91% downside protection and an 8.73% assigned return rate for a 23.78% annualized return rate (comparison purposes only). Ross Stores does not pay dividends at this time. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]