Medcohealth Solutions (MHS) PriceWatch Alert Technicals Showing Bearish

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

Medcohealth Solutions (NYSE: MHS) ended the last trading session at $47.65. So far the stock has hit a 52-week low of $40.50 and 52-week high of $54.63. Medcohealth Solutions stock has been showing support around 46.35 and resistance in the 49.37 range. Technical indicators for the stock are Bearish and S&P gives MHS a positive 4 STAR (out of 5) buy rating. MHS appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Jan '09 50 covered call (MHS AJ) for a net debit in the $44.90 area. That is also the break even stock price for this trade. This covered call has a 131 day duration, provides 5.77% downside protection and an 11.36% assigned return rate for a 31.65% 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 MHS Jan '10 30 Call (YXM AF) and selling the Jan '09 50 call (MHS AJ) for a $17.60 debit. The trade has a 131 day life and would provide 0.10% downside protection and a 13.64% assigned return rate for a 38.00% annualized return rate (for comparison purposes only). Medcohealth Solutions 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]