TCF Financial (TCB) 10/21/09 PriceWatch Alert Technicals Showing Bullish

Posted: Wednesday, October 21, 2009 8:36 AM EDT
By: Market Intelligence Center Staff

TCF Financial (NYSE: TCB) closed yesterday at $14.32. So far the stock has hit a 52-week low of $8.74 and 52-week high of $19.24. TCF Financial stock has been showing support around 13.82 and resistance in the 14.82 range. Technical indicators for the stock are Bullish and S&P gives TCB a very positive 5 STAR (out of 5) strong buy rating. TCB appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at an Apr '10 12.50 covered call (TCB DV) for a net debit in the $11.57 area. That is also the break even stock price for this trade. This covered call has a 178 day duration, provides 19.20% downside protection and an 8.04% assigned return rate for a 16.48% 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 TCB Jan '11 5 Call (ZMZ AA) and selling the Apr '10 12.50 call (TCB DV) for a $7.00 debit. The trade has a 178 day life and would provide 16.20% downside protection and a 7.14% assigned return rate for a 15.00% annualized return rate (for comparison purposes only). TCF Financial has a current annual dividend yield of 1.40%. [WBA-Seven Summits Research]