Reliance Steel and Aluminum (RS) PriceWatch Alert Up To 14.71% Downside Protection

Posted: Monday, July 06, 2009 8:07 AM EDT

Reliance Steel and Aluminum (NYSE: RS) closed yesterday at $38.08. So far the stock has hit a 52-week low of $12.58 and 52-week high of $75.00. Reliance Steel and Aluminum stock has been showing support around 36.17 and resistance in the 39.73 range. Technical indicators for the stock are Bullish and S&P gives RS a weak 2 STAR (out of 5) sell rating. RS appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Sep '09 35 covered call (RS IG) for a net debit in the $32.48 area. That is also the break even stock price for this trade. This covered call has a 75 day duration, provides 14.71% downside protection and a 7.76% assigned return rate for a 37.76% annualized return rate (comparison purposes only). Reliance Steel and Aluminum has a current annual dividend yield of 1.04%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]

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