Hartford Financial (HIG) 10/22/09 PriceWatch Alert Support Down To $24.86

Posted: Thursday, October 22, 2009 8:14 AM EDT
By: Market Intelligence Center Staff

Hartford Financial (NYSE: HIG) closed yesterday at $25.94. So far the stock has hit a 52-week low of $3.33 and 52-week high of $29.59. Hartford Financial stock has been showing support around 24.86 and resistance in the 27.94 range. Technical indicators for the stock are Bullish and S&P gives HIG a neutral 3 STAR (out of 5) hold rating. HIG appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Mar '10 21 covered call (HIG CR) for a net debit in the $19.04 area. That is also the break even stock price for this trade. This covered call has a 149 day duration, provides 26.60% downside protection and a 10.29% assigned return rate for a 25.22% 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 HIG Jan '11 5 Call (OZJ AA) and selling the Mar '10 21 call (HIG CR) for a $14.35 debit. The trade has a 149 day life and would provide 25.40% downside protection and an 11.50% assigned return rate for a 28.00% annualized return rate (for comparison purposes only). Hartford Financial has a current annual dividend yield of 0.73%. [THA-Seven Summits Research]