Lockheed Martin (LMT) PriceWatch Alert Technicals Showing Bullish

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

Lockheed Martin (NYSE: LMT) ended the last trading session at $115.72. So far the stock has hit a 52-week low of $90.44 and 52-week high of $120.30. Lockheed Martin stock has been showing support around 111.04 and resistance in the 118.68 range. Technical indicators for the stock are Bullish and S&P gives LMT a positive 4 STAR (out of 5) buy rating. LMT appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Dec '08 120 covered call (LMT LD) for a net debit in the $110.42 area. That is also the break even stock price for this trade. This covered call has a 103 day duration, provides 4.58% downside protection and an 8.68% assigned return rate for a 30.74% 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 LMT Jan '10 70 Call (WLA AN) and selling the Dec '08 120 call (LMT LD) for a $42.65 debit. The trade has a 103 day life and would provide 2.65% downside protection and a 17.23% assigned return rate for a 61.00% annualized return rate (for comparison purposes only). Lockheed Martin has a current annual dividend yield of 1.43%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]