Discover Financial Services (DFS) 10/29/09 PriceWatch Alert At $11.37 Break Even

Posted: Thursday, October 29, 2009 8:36 AM EDT

Discover Financial Services (NYSE: DFS) closed yesterday at $14.27. So far the stock has hit a 52-week low of $4.73 and 52-week high of $17.36. Discover stock has been showing support around 13.78 and resistance in the 15.14 range. Technical indicators for the stock are Bearish and S&P gives DFS a very positive 5 STAR (out of 5) strong buy rating. DFS appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Apr '10 12.50 covered call (DFS DV) for a net debit in the $11.37 area. That is also the break even stock price for this trade. This covered call has a 170 day duration, provides 20.32% downside protection and a 9.94% assigned return rate for a 21.34% annualized return rate (comparison purposes only). Discover has a current annual dividend yield of 0.53%. [THA-Seven Summits Research]

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