Genzyme (GENZ) PriceWatch Alert for September 3, 2008

Posted on Wednesday, September 03, 2008 8:07 AM

Genzyme (NasdaqNM: GENZ) ended the last trading session at $77.84. So far the stock has hit a 52-week low of $61.16 and 52-week high of $83.97. Genzyme stock has been showing support around 76.26 and resistance in the 80.96 range. Technical indicators for the stock are Bullish and S&P gives GENZ a very positive 5 STAR (out of 5) strong buy rating. GENZ appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Jan '09 80 covered call (GAA AP) for a net debit in the $72.24 area. That is also the break even stock price for this trade. This covered call has a 136 day duration, provides 7.19% downside protection and a 10.74% assigned return rate for a 28.83% 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 GENZ Jan '10 40 Call (YGZ AH) and selling the Jan '09 80 call (GAA AP) for a $35.80 debit. The trade has a 136 day life and would provide 2.62% downside protection and an 11.73% assigned return rate for a 31.00% annualized return rate (for comparison purposes only). Genzyme 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]