Goldman Sachs (GS) PriceWatch Alert Support Down To $155.57

Posted on Monday, September 08, 2008 8:07 AM

Goldman Sachs (NYSE: GS) ended the last trading session at $163.24. So far the stock has hit a 52-week low of $140.27 and 52-week high of $250.70. Goldman Sachs stock has been showing support around 155.57 and resistance in the 167.55 range. Technical indicators for the stock are Bearish and S&P gives GS a positive 4 STAR (out of 5) buy rating. GS appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Jan '09 160 covered call (GPY AL) for a net debit in the $143.84 area. That is also the break even stock price for this trade. This covered call has a 131 day duration, provides 11.88% downside protection and an 11.23% assigned return rate for a 31.30% 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 GS Jan '10 70 Call (YFT AN) and selling the Jan '09 160 call (GPY AL) for a $77.55 debit. The trade has a 131 day life and would provide 9.61% downside protection and a 16.05% assigned return rate for a 45.00% annualized return rate (for comparison purposes only). Goldman Sachs has a current annual dividend yield of 0.85%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]