Pulte Homes Inc. (PHM) PriceWatch Alert Support Down To $11.28

Posted: Tuesday, April 28, 2009 8:07 AM EDT

Pulte Homes Inc. (NYSE: PHM) closed yesterday at $11.97. 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 11.28 and resistance in the 12.80 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 $6.47 area. That is also the break even stock price for this trade. This covered call has a 263 day duration, provides 45.95% downside protection and a 15.92% assigned return rate for a 22.09% 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 $2.10 debit. The trade has a 263 day life and would provide 40.69% downside protection and a 19.05% assigned return rate for a 26.00% 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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