Genzyme (GENZ) PriceWatch Alert With Support Around $76.81

Posted on Thursday, September 04, 2008 8:07 AM

Genzyme (NasdaqNM: GENZ) closed yesterday at $78.22. 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 76.81 and resistance in the 79.13 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 $72.52 area. That is also the break even stock price for this trade. This covered call has a 135 day duration, provides 7.29% downside protection and a 10.31% assigned return rate for a 27.89% 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 50 Call (YGZ AJ) and selling the Jan '09 80 call (GAA AP) for a $25.85 debit. The trade has a 135 day life and would provide 3.03% downside protection and a 16.05% assigned return rate for a 43.00% 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]