TJX Companies (TJX) PriceWatch Alert Shows Bullish Technicals

Posted on Friday, August 01, 2008 8:07 AM

TJX Companies (NYSE: TJX) closed yesterday at $33.71. So far the stock has hit a 52-week low of $25.49 and 52-week high of $36.44. TJX stock has been showing support around 32.47 and resistance in the 35.35 range. Technical indicators for the stock are Bullish and S&P gives TJX a positive 4 STAR (out of 5) buy rating. TJX appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Jan '09 35 covered call (TJX AG) for a net debit in the $31.06 area. That is also the break even stock price for this trade. This covered call has a 169 day duration, provides 7.86% downside protection and a 12.69% assigned return rate for a 27.40% 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 TJX Jan '09 30 Call (TJX AF) and selling the Jan '09 35 call (TJX AG) for a $3.00 debit. The trade has a 169 day life and would provide 2.11% downside protection and a 66.67% assigned return rate for a 144.00% annualized return rate (for comparison purposes only). TJX has a current annual dividend yield of 1.35%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]