Ralcorp Holdings Inc. (RAH) 10/30/09 PriceWatch Alert Up To 3.20% Downside Protection

Posted: Friday, October 30, 2009 8:08 AM EDT

Ralcorp Holdings Inc. (NYSE: RAH) closed yesterday at $54.68. So far the stock has hit a 52-week low of $50.81 and 52-week high of $71.45. Ralcorp Holdings stock has been showing support around 53.68 and resistance in the 55.44 range. Technical indicators for the stock are Bearish and S&P gives RAH a neutral 3 STAR (out of 5) hold rating. RAH appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at a Dec '09 55 covered call (RAH LK) for a net debit in the $52.93 area. That is also the break even stock price for this trade. This covered call has a 50 day duration, provides 3.20% downside protection and a 3.91% assigned return rate for a 28.55% annualized return rate (comparison purposes only). Ralcorp Holdings does not pay dividends at this time. [FBB-Seven Summits Research]

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