Mirant (MIR) PriceWatch Alert Technicals Showing Bearish
Posted on Friday, August 29, 2008 8:07 AM
Mirant (NYSE: MIR) closed yesterday at $29.92. So far the stock has hit a 52-week low of $26.96 and 52-week high of $44.61. Mirant stock has been showing support around 29.52 and resistance in the 30.40 range. Technical indicators for the stock are Bearish and S&P gives MIR a positive 4 STAR (out of 5) buy rating. MIR appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '09 30 covered call (MIR AF) for a net debit in the $26.97 area. That is also the break even stock price for this trade. This covered call has a 141 day duration, provides 9.86% downside protection and an 11.23% assigned return rate for a 29.08% 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 MIR Jan '10 15 Call (LGV AC) and selling the Jan '09 30 call (MIR AF) for a $13.30 debit. The trade has a 141 day life and would provide 5.41% downside protection and a 12.78% assigned return rate for a 33.00% annualized return rate (for comparison purposes only). Mirant 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]