Archer Daniels Midland (ADM) PriceWatch Alert Targets 21.18% Downside Protection

Posted on Friday, September 26, 2008 8:07 AM

Archer Daniels Midland (NYSE: ADM) closed yesterday at $23.61. So far the stock has hit a 52-week low of $19.70 and 52-week high of $48.95. Archer Daniels Midland stock has been showing support around 22.70 and resistance in the 24.40 range. Technical indicators for the stock are Bearish and S&P gives ADM a positive 4 STAR (out of 5) buy rating. ADM appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Mar '09 20 covered call (ADM CD) for a net debit in the $18.61 area. That is also the break even stock price for this trade. This covered call has a 176 day duration, provides 21.18% downside protection and a 7.47% assigned return rate for a 15.49% annualized return rate (comparison purposes only). Archer Daniels Midland has a current annual dividend yield of 2.18%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]