Crown Holdings (CCK) PriceWatch Alert Down To $19.96 Break Even

Posted: Wednesday, June 17, 2009 8:07 AM EDT
By: Market Intelligence Center Staff

Crown Holdings (NYSE: CCK) closed yesterday at $22.46. So far the stock has hit a 52-week low of $13.37 and 52-week high of $29.60. Crown stock has been showing support around 21.85 and resistance in the 23.19 range. Technical indicators for the stock are Bearish and S&P gives CCK a very positive 5 STAR (out of 5) strong buy rating. CCK appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Jan '10 22.50 covered call (CCK AX) for a net debit in the $19.96 area. That is also the break even stock price for this trade. This covered call has a 213 day duration, provides 11.13% downside protection and a 12.73% assigned return rate for a 21.81% 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 CCK Jan '10 20 Call (CCK AD) and selling the Jan '10 22.50 call (CCK AX) for a $1.65 debit. The trade has a 213 day life and would provide 3.61% downside protection and a 51.52% assigned return rate for an 88.00% annualized return rate (for comparison purposes only). Crown 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]