Pulte Homes Inc. (PHM) PriceWatch Alert Shows Bullish Technicals

Posted: Monday, April 27, 2009 8:07 AM EDT

Pulte Homes Inc. (NYSE: PHM) ended the last trading session at $11.99. So far the stock has hit a 52-week low of $6.49 and 52-week high of $17.32. Pulte Homes stock has been showing support around 10.77 and resistance in the 12.81 range. Technical indicators for the stock are Bullish and S&P gives PHM a positive 4 STAR (out of 5) buy rating. PHM appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '10 7.50 covered call (YHI AS) for a net debit in the $6.49 area. That is also the break even stock price for this trade. This covered call has a 264 day duration, provides 45.87% downside protection and a 15.56% assigned return rate for a 21.52% 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 PHM Jan '10 5 Call (YHI AA) and selling the Jan '10 7.50 call (YHI AS) for a $2.05 debit. The trade has a 264 day life and would provide 41.20% downside protection and a 21.95% assigned return rate for a 30.00% annualized return rate (for comparison purposes only). Pulte Homes 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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