Honda Motor (HMC) PriceWatch Alert Shows Bearish Technicals

Posted: Tuesday, June 16, 2009 8:07 AM EDT

Honda Motor (NYSE: HMC) closed yesterday at $28.00. So far the stock has hit a 52-week low of $17.35 and 52-week high of $36.29. Honda Motor stock has been showing support around 27.30 and resistance in the 28.90 range. Technical indicators for the stock are Bearish and S&P gives HMC a weak 2 STAR (out of 5) sell rating. HMC appears on the Investors Observer Stocks In The News list. Barclays Capital downgraded HMC on Friday to Equal Weight from Overweight. For a hedged play on this stock, look at an Oct '09 25 covered call (HMC JE) for a net debit in the $23.90 area. That is also the break even stock price for this trade. This covered call has a 123 day duration, provides 14.64% downside protection and a 4.60% assigned return rate for a 13.66% annualized return rate (comparison purposes only). Honda Motor has a current annual dividend yield of 1.34%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]

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