Target (TGT) PriceWatch Alert Bullish Price Movement
Posted on Friday, August 29, 2008 8:07 AM
Target (NYSE: TGT) closed yesterday at $53.88. So far the stock has hit a 52-week low of $42.32 and 52-week high of $68.50. Target stock has been showing support around 52.49 and resistance in the 54.61 range. Technical indicators for the stock are Bullish and S&P gives TGT a neutral 3 STAR (out of 5) hold rating. TGT appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at an Oct '08 55 covered call (TGT JK) for a net debit in the $51.47 area. That is also the break even stock price for this trade. This covered call has a 50 day duration, provides 4.47% downside protection and a 6.86% assigned return rate for a 50.07% 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 TGT Jan '10 30 Call (WDH AF) and selling the Oct '08 55 call (TGT JK) for a $23.64 debit. The trade has a 50 day life and would provide 0.45% downside protection and a 5.75% assigned return rate for a 42.00% annualized return rate (for comparison purposes only). Target has a current annual dividend yield of 1.23%. [For more information on these strategies along with more details on possible risks go to
www.iotogo.com/HPWAinfo]