Wynn Resorts (WYNN) PriceWatch Alert With Support Around $83.26

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

Wynn Resorts (NasdaqNM: WYNN) ended the last trading session at $89.17. So far the stock has hit a 52-week low of $69.27 and 52-week high of $176.14. Wynn Resorts stock has been showing support around 83.26 and resistance in the 92.92 range. Technical indicators for the stock are Bearish and S&P gives WYNN a weak 2 STAR (out of 5) sell rating. WYNN appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Dec '08 90 covered call (UWY LR) for a net debit in the $78.97 area. That is also the break even stock price for this trade. This covered call has a 103 day duration, provides 11.44% downside protection and a 13.97% assigned return rate for a 49.50% 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 WYNN Jan '10 40 Call (YPW AH) and selling the Dec '08 90 call (UWY LR) for a $40.95 debit. The trade has a 103 day life and would provide 9.22% downside protection and a 22.10% assigned return rate for a 78.00% annualized return rate (for comparison purposes only). Wynn Resorts 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]