Zions Bancorporation (ZION) 10/26/09 PriceWatch Alert Bullish Price Movement

Posted: Monday, October 26, 2009 8:23 AM EDT
By: Market Intelligence Center Staff

Zions Bancorporation (NasdaqNM: ZION) ended the last trading session at $16.82. 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 16.01 and resistance in the 17.79 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 $12.72 area. That is also the break even stock price for this trade. This covered call has a 173 day duration, provides 24.38% downside protection and a 10.06% assigned return rate for a 21.23% 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 14 call (ZNQ DS) for an $8.20 debit. The trade has a 173 day life and would provide 21.52% downside protection and a 9.76% assigned return rate for a 21.00% annualized return rate (for comparison purposes only). Zions Bancorporation has a current annual dividend yield of 0.24%. [ABR-Seven Summits Research]