SanDisk (SNDK) 10/23/09 PriceWatch Alert Support Down To $21.71

Posted: Friday, October 23, 2009 8:34 AM EDT

SanDisk (NasdaqNM: SNDK) closed yesterday at $22.85. So far the stock has hit a 52-week low of $5.07 and 52-week high of $24.25. SanDisk stock has been showing support around 21.71 and resistance in the 24.33 range. Technical indicators for the stock are Bullish and S&P gives SNDK a neutral 3 STAR (out of 5) hold rating. SNDK appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '10 20 covered call (SWQ AD) for a net debit in the $19.00 area. That is also the break even stock price for this trade. This covered call has an 85 day duration, provides 16.85% downside protection and a 5.26% assigned return rate for a 22.60% 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 SNDK Jan '11 5 Call (OWS AA) and selling the Jan '10 20 call (SWQ AD) for a $14.30 debit. The trade has an 85 day life and would provide 15.54% downside protection and a 4.90% assigned return rate for a 21.00% annualized return rate (for comparison purposes only). SanDisk does not pay dividends at this time. [FBB-Seven Summits Research]

Click Symbol For More News On: (SNDK)