Zions Bancorporation (ZION) 10/22/09 PriceWatch Alert Shows Bullish Technicals

Posted: Thursday, October 22, 2009 8:27 AM EDT

Zions Bancorporation (NasdaqNM: ZION) closed yesterday at $16.73. 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 16.16 and resistance in the 17.56 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 14 covered call (ZNQ DS) for a net debit in the $12.63 area. That is also the break even stock price for this trade. This covered call has a 177 day duration, provides 24.51% downside protection and a 10.85% assigned return rate for a 22.37% 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 2.50 Call (OIO AZ) and selling the Apr '10 14 call (ZNQ DS) for a $10.65 debit. The trade has a 177 day life and would provide 21.40% downside protection and a 7.98% assigned return rate for a 16.00% annualized return rate (for comparison purposes only). Zions Bancorporation has a current annual dividend yield of 0.22%. [THA-Seven Summits Research]

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