Kohls (KSS) PriceWatch Alert With Support Around $48.46

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

Kohls (NYSE: KSS) ended the last trading session at $51.04. So far the stock has hit a 52-week low of $36.81 and 52-week high of $63.97. Kohls stock has been showing support around 48.46 and resistance in the 52.50 range. Technical indicators for the stock are Bullish and S&P gives KSS a neutral 3 STAR (out of 5) hold rating. KSS appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Jan '09 50 covered call (KSS AJ) for a net debit in the $44.64 area. That is also the break even stock price for this trade. This covered call has a 131 day duration, provides 12.54% downside protection and a 12.01% assigned return rate for a 33.46% 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 KSS Jan '10 20 Call (YSK AD) and selling the Jan '09 50 call (KSS AJ) for a $26.20 debit. The trade has a 131 day life and would provide 9.48% downside protection and a 14.50% assigned return rate for a 40.00% annualized return rate (for comparison purposes only). Kohls 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]