PNC Financial (PNC) PriceWatch Alert for June 29, 2009

Posted: Monday, June 29, 2009 8:07 AM EDT
By: Market Intelligence Center Staff

PNC Financial (NYSE: PNC) ended the last trading session at $39.40. So far the stock has hit a 52-week low of $16.20 and 52-week high of $87.99. PNC Financial stock has been showing support around 38.57 and resistance in the 41.07 range. Technical indicators for the stock are Bearish and S&P gives PNC a neutral 3 STAR (out of 5) hold rating. PNC appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at an Aug '09 36 covered call (PZH HA) for a net debit in the $34.10 area. That is also the break even stock price for this trade. This covered call has a 54 day duration, provides 13.45% downside protection and a 5.57% assigned return rate for a 37.66% 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 PNC Jan '11 5 Call (VSM AA) and selling the Aug '09 36 call (PZH HA) for a $29.65 debit. The trade has a 54 day life and would provide 12.06% downside protection and a 4.55% assigned return rate for a 31.00% annualized return rate (for comparison purposes only). PNC Financial has a current annual dividend yield of 1.00%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]