Symantec (SYMC) 10/29/09 PriceWatch Alert Technicals Showing Bearish

Posted: Thursday, October 29, 2009 8:39 AM EDT

Symantec (NasdaqNM: SYMC) closed yesterday at $15.73. So far the stock has hit a 52-week low of $10.05 and 52-week high of $18.17. Symantec stock has been showing support around 15.34 and resistance in the 16.40 range. Technical indicators for the stock are Bearish and S&P gives SYMC a neutral 3 STAR (out of 5) hold rating. SYMC appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Apr '10 15 covered call (SYQ DC) for a net debit in the $13.58 area. That is also the break even stock price for this trade. This covered call has a 170 day duration, provides 13.67% downside protection and a 10.46% assigned return rate for a 22.45% 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 SYMC Jan '11 10 Call (OBL AB) and selling the Apr '10 15 call (SYQ DC) for a $4.45 debit. The trade has a 170 day life and would provide 8.14% downside protection and a 12.36% assigned return rate for a 27.00% annualized return rate (for comparison purposes only). Symantec does not pay dividends at this time. [THA-Seven Summits Research]

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