Google (GOOG) PriceWatch Alert With Support Around $459.67

Posted on Wednesday, July 23, 2008 8:07 AM

Google (NasdaqNM: GOOG) closed yesterday at $477.11. 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 459.67 and resistance in the 488.97 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 '08 530 covered call (GOP IW) for a net debit in the $468.91 area. That is also the break even stock price for this trade. This covered call has a 59 day duration, provides 1.72% downside protection and a 13.03% assigned return rate for an 80.60% 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 '09 430 Call (GOP AF) and selling the Sep '08 530 call (GOP IW) for a $69.60 debit. The trade has a 59 day life and would provide no downside protection and a 43.68% assigned return rate for a 270.00% 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]