Motorola (MOT) PriceWatch Alert Shows Bullish Technicals
Posted on Tuesday, August 26, 2008 8:07 AM
Motorola (NYSE: MOT) closed yesterday at $9.56. So far the stock has hit a 52-week low of $6.62 and 52-week high of $19.68. Motorola stock has been showing support around 9.29 and resistance in the 10.01 range. Technical indicators for the stock are Bullish and S&P gives MOT a neutral 3 STAR (out of 5) hold rating. MOT appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at an Apr '09 9 covered call (MOT DL) for a net debit in the $7.93 area. That is also the break even stock price for this trade. This covered call has a 235 day duration, provides 17.05% downside protection and a 13.49% assigned return rate for a 20.96% 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 MOT Jan '10 5 Call (WMA AA) and selling the Apr '09 9 call (MOT DL) for a $3.32 debit. The trade has a 235 day life and would provide 12.97% downside protection and a 20.48% assigned return rate for a 32.00% annualized return rate (for comparison purposes only). Motorola has a current annual dividend yield of 2.07%. [For more information on these strategies along with more details on possible risks go to
www.iotogo.com/HPWAinfo]