Autodesk (ADSK) PriceWatch Alert Technicals Showing Bearish
Posted on Thursday, September 04, 2008 8:07 AM
Autodesk (NasdaqNM: ADSK) closed yesterday at $34.62. So far the stock has hit a 52-week low of $29.58 and 52-week high of $51.32. Autodesk stock has been showing support around 33.59 and resistance in the 35.99 range. Technical indicators for the stock are Bearish and S&P gives ADSK a very positive 5 STAR (out of 5) strong buy rating. ADSK appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at a Jan '09 32.50 covered call (ADQ AZ) for a net debit in the $29.92 area. That is also the break even stock price for this trade. This covered call has a 135 day duration, provides 13.58% downside protection and an 8.62% assigned return rate for a 23.31% 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 ADSK Jan '10 20 Call (LAL AD) and selling the Jan '09 32.50 call (ADQ AZ) for an $11.75 debit. The trade has a 135 day life and would provide 8.29% downside protection and a 6.38% assigned return rate for a 17.00% annualized return rate (for comparison purposes only). Autodesk 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]