Motorola (MOT) 9/21/09 PriceWatch Alert Support Down To $8.49

Posted: Monday, September 21, 2009 8:14 AM EDT

Motorola (NYSE: MOT) ended the last trading session at $8.96. So far the stock has hit a 52-week low of $2.98 and 52-week high of $9.45. Motorola stock has been showing support around 8.49 and resistance in the 9.23 range. Technical indicators for the stock are Bullish and S&P gives MOT a neutral 3 STAR (out of 5) hold rating. MOT appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Apr '10 8 covered call (MOT DK) for a net debit in the $7.10 area. That is also the break even stock price for this trade. This covered call has a 208 day duration, provides 20.76% downside protection and a 12.68% assigned return rate for a 22.24% 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 MOT Jan '11 2.50 Call (VMA AZ) and selling the Apr '10 8 call (MOT DK) for a $4.74 debit. The trade has a 208 day life and would provide 19.20% downside protection and a 16.03% assigned return rate for a 28.00% annualized return rate (for comparison purposes only). Motorola does not pay dividends at this time. [ABR-Seven Summits Research] For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo

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