Noble Energy (NBL) PriceWatch Alert Shows Neutral Technicals

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

Noble Energy (NYSE: NBL) closed yesterday at $56.44. So far the stock has hit a 52-week low of $30.89 and 52-week high of $96.90. Noble Energy stock has been showing support around 54.57 and resistance in the 59.59 range. Technical indicators for the stock are Neutral and S&P gives NBL a neutral 3 STAR (out of 5) hold rating. NBL appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Nov '09 55 covered call (NBL KK) for a net debit in the $49.64 area. That is also the break even stock price for this trade. This covered call has a 138 day duration, provides 12.05% downside protection and a 10.80% assigned return rate for a 28.56% 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 NBL Jan '11 22.50 Call (XLH AX) and selling the Nov '09 55 call (NBL KK) for a $28.05 debit. The trade has a 138 day life and would provide 10.44% downside protection and a 15.86% assigned return rate for a 42.00% annualized return rate (for comparison purposes only). Noble Energy has a current annual dividend yield of 1.21%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]

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