Old Dominion Freight Line (ODFL) PriceWatch Alert Targets 16.82% Downside Protection

Posted: Monday, June 22, 2009 8:07 AM EDT
By: Market Intelligence Center Staff

Old Dominion Freight Line (NasdaqNM: ODFL) ended the last trading session at $33.30. So far the stock has hit a 52-week low of $18.47 and 52-week high of $40.09. Old Dominion Freight Line stock has been showing support around 31.83 and resistance in the 34.41 range. Technical indicators for the stock are Bullish and S&P gives ODFL a very positive 5 STAR (out of 5) strong buy rating. ODFL appears on the Investors Observer Stocks In The News list. Robert W. Baird upgraded ODFL on Thursday to Outperform from Neutral. For a hedged play on this stock, look at an Oct '09 30 covered call (QPS JF) for a net debit in the $27.70 area. That is also the break even stock price for this trade. This covered call has an 117 day duration, provides 16.82% downside protection and an 8.30% assigned return rate for a 25.90% 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 ODFL Jan '10 22.50 Call (QPS AX) and selling the Oct '09 30 call (QPS JF) for a $6.90 debit. The trade has an 117 day life and would provide 11.71% downside protection and an 8.70% assigned return rate for a 27.00% annualized return rate (for comparison purposes only). Old Dominion Freight Line 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]