MGM Mirage (MGM) PriceWatch Alert Support Down To $30.87

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

MGM Mirage (NYSE: MGM) ended the last trading session at $32.62. So far the stock has hit a 52-week low of $21.65 and 52-week high of $100.50. MGM Mirage stock has been showing support around 30.87 and resistance in the 33.67 range. Technical indicators for the stock are Bullish and S&P gives MGM a neutral 3 STAR (out of 5) hold rating. MGM appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Dec '08 25 covered call (MGM LE) for a net debit in the $23.12 area. That is also the break even stock price for this trade. This covered call has a 103 day duration, provides 29.12% downside protection and an 8.13% assigned return rate for a 28.82% 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 MGM Jan '10 10 Call (YDM AX) and selling the Dec '08 25 call (MGM LE) for a $14.15 debit. The trade has a 103 day life and would provide 25.97% downside protection and a 6.01% assigned return rate for a 21.00% annualized return rate (for comparison purposes only). MGM Mirage 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]