Apple Inc. (AAPL) PriceWatch Alert Up To 60.44% Return

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

Apple Inc. (NasdaqNM: AAPL) closed yesterday at $162.02. So far the stock has hit a 52-week low of $111.62 and 52-week high of $202.96. Apple stock has been showing support around 140.87 and resistance in the 173.33 range. Technical indicators for the stock are Bearish and S&P gives AAPL a positive 4 STAR (out of 5) buy rating. AAPL appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Sep '08 170 covered call (APV IN) for a net debit in the $154.87 area. That is also the break even stock price for this trade. This covered call has a 59 day duration, provides 4.41% downside protection and a 9.77% assigned return rate for a 60.44% 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 AAPL Jan '09 110 Call (QAA AB) and selling the Sep '08 170 call (APV IN) for a $49.60 debit. The trade has a 59 day life and would provide 1.49% downside protection and a 20.97% assigned return rate for a 130.00% annualized return rate (for comparison purposes only). Apple 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]