Zions Bancorporation (ZION) 10/20/09 PriceWatch Alert Support Down To $17.46

Posted: Tuesday, October 20, 2009 8:35 AM EDT

Zions Bancorporation (NasdaqNM: ZION) closed yesterday at $18.33. So far the stock has hit a 52-week low of $5.90 and 52-week high of $45.00. Zions Bancorporation stock has been showing support around 17.46 and resistance in the 19.06 range. Technical indicators for the stock are Bullish and S&P gives ZION a neutral 3 STAR (out of 5) hold rating. ZION appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Apr '10 15 covered call (ZNQ DC) for a net debit in the $13.53 area. That is also the break even stock price for this trade. This covered call has a 179 day duration, provides 26.19% downside protection and a 10.86% assigned return rate for a 22.15% 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 ZION Jan '11 5 Call (OIO AA) and selling the Apr '10 15 call (ZNQ DC) for an $8.85 debit. The trade has a 179 day life and would provide 24.44% downside protection and a 12.99% assigned return rate for a 26.00% annualized return rate (for comparison purposes only). Zions Bancorporation has a current annual dividend yield of 0.21%. [ATU-Seven Summits Research]

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