Hewitt Associates (HEW) PriceWatch Alert Bearish Price Movement

Posted: Monday, June 01, 2009 8:07 AM EDT
By: Market Intelligence Center Staff

Hewitt Associates (NYSE: HEW) ended the last trading session at $29.00. So far the stock has hit a 52-week low of $22.78 and 52-week high of $42.22. Hewitt Associates stock has been showing support around 28.39 and resistance in the 29.73 range. Technical indicators for the stock are Bearish and S&P gives HEW a neutral 3 STAR (out of 5) hold rating. HEW appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at a Jan '10 25 covered call (VEZ AE) for a net debit in the $23.60 area. That is also the break even stock price for this trade. This covered call has a 229 day duration, provides 18.62% downside protection and a 5.93% assigned return rate for a 9.46% 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 HEW Jan '10 20 Call (VEZ AD) and selling the Jan '10 25 call (VEZ AE) for a $4.30 debit. The trade has a 229 day life and would provide 16.21% downside protection and a 16.28% assigned return rate for a 26.00% annualized return rate (for comparison purposes only). Hewitt Associates 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]