Apple Inc. (AAPL) PriceWatch Alert Support At Around $149.69

Tuesday, August 05, 2008 8:07 AM EDT

Apple Inc. (NasdaqNM: AAPL) closed yesterday at $153.23. 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 149.69 and resistance in the 159.67 range. Technical indicators for the stock are Bearish and S&P gives AAPL a weak 2 STAR (out of 5) sell rating. AAPL appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at an Oct '08 160 covered call (APV JL) for a net debit in the $144.53 area. That is also the break even stock price for this trade. This covered call has a 74 day duration, provides 5.68% downside protection and a 10.70% assigned return rate for a 52.80% 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 '09 115 Call (QAA AC) and selling the Oct '08 160 call (APV JL) for a $35.35 debit. The trade has a 74 day life and would provide 1.88% downside protection and a 27.30% assigned return rate for a 135.00% 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]

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