Target (TGT) PriceWatch Alert Up To 35.58% Return

Posted on Tuesday, September 02, 2008 8:07 AM

Target (NYSE: TGT) ended the last trading session at $53.02. 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 52.43 and resistance in the 54.07 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 a Jan '09 55 covered call (TGT AK) for a net debit in the $48.52 area. That is also the break even stock price for this trade. This covered call has a 137 day duration, provides 8.49% downside protection and a 13.36% assigned return rate for a 35.58% 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 Jan '09 55 call (TGT AK) for a $21.00 debit. The trade has a 137 day life and would provide 3.81% downside protection and a 19.05% assigned return rate for a 51.00% annualized return rate (for comparison purposes only). Target has a current annual dividend yield of 1.21%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]