PNC Financial (PNC) PriceWatch Alert Bearish Price Movement

Posted: Thursday, July 02, 2009 8:07 AM EDT

PNC Financial (NYSE: PNC) closed yesterday at $38.31. 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 37.40 and resistance in the 39.92 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 35 covered call (PZH HG) for a net debit in the $33.41 area. That is also the break even stock price for this trade. This covered call has a 51 day duration, provides 12.79% downside protection and a 4.76% assigned return rate for a 34.06% 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 35 call (PZH HG) for a $28.70 debit. The trade has a 51 day life and would provide 12.03% downside protection and a 4.53% assigned return rate for a 32.00% annualized return rate (for comparison purposes only). PNC Financial has a current annual dividend yield of 1.01%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]

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