Whirlpool (WHR) PriceWatch Alert Support Down To $42.38

Posted: Monday, July 06, 2009 8:07 AM EDT
By: Market Intelligence Center Staff

Whirlpool (NYSE: WHR) closed yesterday at $43.52. So far the stock has hit a 52-week low of $19.19 and 52-week high of $91.87. Whirlpool stock has been showing support around 42.38 and resistance in the 44.60 range. Technical indicators for the stock are Bullish and S&P gives WHR a weak 2 STAR (out of 5) sell rating. WHR appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Sep '09 43 covered call (WHR IC) for a net debit in the $39.82 area. That is also the break even stock price for this trade. This covered call has a 75 day duration, provides 8.50% downside protection and a 7.99% assigned return rate for a 38.86% 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 WHR Jan '11 17.50 Call (VOR AW) and selling the Sep '09 43 call (WHR IC) for a $22.60 debit. The trade has a 75 day life and would provide 7.86% downside protection and a 12.83% assigned return rate for a 62.00% annualized return rate (for comparison purposes only). Whirlpool has a current annual dividend yield of 3.93%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]