Google (GOOG) PriceWatch Alert for July 15, 2008

Posted on Tuesday, July 15, 2008 8:07 AM

Google (NasdaqNM: GOOG) closed yesterday at $521.62. So far the stock has hit a 52-week low of $412.11 and 52-week high of $747.24. Google stock has been showing support around 501.10 and resistance in the 550.32 range. Technical indicators for the stock are Bearish and S&P gives GOOG a neutral 3 STAR (out of 5) hold rating. GOOG appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Sep '08 580 covered call (GOO IP) for a net debit in the $506.62 area. That is also the break even stock price for this trade. This covered call has a 67 day duration, provides 2.88% downside protection and a 14.48% assigned return rate for a 78.91% 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 GOOG Jan '09 450 Call (GOP AJ) and selling the Sep '08 580 call (GOO IP) for an $88.50 debit. The trade has a 67 day life and would provide no downside protection and a 46.89% assigned return rate for a 255.00% annualized return rate (for comparison purposes only). Google 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]