Wyeth (WYE) PriceWatch Alert Support Down To $36.67

Posted on Monday, October 06, 2008 8:07 AM

Wyeth (NYSE: WYE) ended the last trading session at $37.78. So far the stock has hit a 52-week low of $35.80 and 52-week high of $49.80. Wyeth stock has been showing support around 36.67 and resistance in the 39.15 range. Technical indicators for the stock are Bearish and S&P gives WYE a neutral 3 STAR (out of 5) hold rating. WYE appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '09 37.50 covered call (WYE AU) for a net debit in the $34.58 area. That is also the break even stock price for this trade. This covered call has a 103 day duration, provides 8.47% downside protection and an 8.44% assigned return rate for a 29.92% 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 WYE Jan '10 25 Call (WHP AE) and selling the Jan '09 37.50 call (WYE AU) for an $11.05 debit. The trade has a 103 day life and would provide 4.58% downside protection and a 13.12% assigned return rate for a 47.00% annualized return rate (for comparison purposes only). Wyeth has a current annual dividend yield of 2.94%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]