Oracle (ORCL) PriceWatch Alert Up To 21.06% Return

Posted: Friday, March 13, 2009 8:07 AM EDT

Oracle (NasdaqNM: ORCL) closed yesterday at $15.63. So far the stock has hit a 52-week low of $13.80 and 52-week high of $23.62. Oracle stock has been showing support around 14.86 and resistance in the 16.06 range. Technical indicators for the stock are Bearish and S&P gives ORCL a very positive 5 STAR (out of 5) strong buy rating. ORCL appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Jan '10 15 covered call (WOQ AC) for a net debit in the $12.73 area. That is also the break even stock price for this trade. This covered call has a 309 day duration, provides 18.55% downside protection and a 17.83% assigned return rate for a 21.06% 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 ORCL Jan '10 12.50 Call (WOQ AV) and selling the Jan '10 15 call (WOQ AC) for a $1.55 debit. The trade has a 309 day life and would provide 10.11% downside protection and a 61.29% assigned return rate for a 72.00% annualized return rate (for comparison purposes only). Oracle 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]

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