Archer Daniels Midland (ADM) PriceWatch Alert With 22.42% Downside Protection

Posted on Thursday, October 02, 2008 8:07 AM

Archer Daniels Midland (NYSE: ADM) closed yesterday at $21.41. 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 20.17 and resistance in the 23.49 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 Jan '09 17.50 covered call (ADM AW) for a net debit in the $16.61 area. That is also the break even stock price for this trade. This covered call has a 107 day duration, provides 22.42% downside protection and a 5.36% assigned return rate for an 18.28% annualized return rate (comparison purposes only). Archer Daniels Midland has a current annual dividend yield of 2.54%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]