Walmart Stores (WMT) PriceWatch Alert With Support Around $58.35

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

Walmart Stores (NYSE: WMT) ended the last trading session at $60.74. So far the stock has hit a 52-week low of $42.09 and 52-week high of $61.00. Walmart Stores stock has been showing support around 58.35 and resistance in the 62.07 range. Technical indicators for the stock are Bullish and S&P gives WMT a positive 4 STAR (out of 5) buy rating. WMT appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Dec '08 57.50 covered call (WMT LY) for a net debit in the $55.19 area. That is also the break even stock price for this trade. This covered call has a 103 day duration, provides 9.14% downside protection and a 4.19% assigned return rate for a 14.83% 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 WMT Jan '10 30 Call (WWT AF) and selling the Dec '08 57.50 call (WMT LY) for a $25.70 debit. The trade has a 103 day life and would provide 8.30% downside protection and a 7.00% assigned return rate for a 25.00% annualized return rate (for comparison purposes only). Walmart Stores has a current annual dividend yield of 1.59%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]