A T and T (T) PriceWatch Alert Support Down To $30.93

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

A T and T (NYSE: T) closed yesterday at $31.82. So far the stock has hit a 52-week low of $31.17 and 52-week high of $42.97. A T and T stock has been showing support around 30.93 and resistance in the 32.29 range. Technical indicators for the stock are Bearish and S&P gives T a very positive 5 STAR (out of 5) strong buy rating. T appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Jan '09 32.50 covered call (T AZ) for a net debit in the $29.38 area. That is also the break even stock price for this trade. This covered call has a 178 day duration, provides 7.67% downside protection and a 10.62% assigned return rate for a 21.78% 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 T Jan '09 30 Call (T AF) and selling the Jan '09 32.50 call (T AZ) for a $1.46 debit. The trade has a 178 day life and would provide 1.13% downside protection and a 71.23% assigned return rate for a 146.00% annualized return rate (for comparison purposes only). A T and T 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]