Johnson Controls (JCI) 8/27/09 PriceWatch Alert With Support Around $24.27

Posted: Thursday, August 27, 2009 8:12 AM EDT
By: Market Intelligence Center Staff

Johnson Controls (NYSE: JCI) closed yesterday at $24.88. So far the stock has hit a 52-week low of $8.35 and 52-week high of $36.00. Johnson Controls stock has been showing support around 24.27 and resistance in the 25.39 range. Technical indicators for the stock are Bullish and S&P gives JCI a neutral 3 STAR (out of 5) hold rating. JCI appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Apr '10 25 covered call (JCI DE) for a net debit in the $21.58 area. That is also the break even stock price for this trade. This covered call has a 233 day duration, provides 13.26% downside protection and a 15.85% assigned return rate for a 24.83% 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 JCI Jan '11 15 Call (VQU AC) and selling the Apr '10 25 call (JCI DE) for a $7.85 debit. The trade has a 233 day life and would provide 8.16% downside protection and a 27.39% assigned return rate for a 43.00% annualized return rate (for comparison purposes only). Johnson Controls has a current annual dividend yield of 2.11%. [THA-Seven Summits Research] For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo