Agilent Technologies Inc. (A) 10/30/09 PriceWatch Alert At $23.75 Break Even

Posted: Friday, October 30, 2009 8:33 AM EDT

Agilent Technologies Inc. (NYSE: A) closed yesterday at $25.73. So far the stock has hit a 52-week low of $12.02 and 52-week high of $29.38. Agilent stock has been showing support around 25.10 and resistance in the 26.22 range. Technical indicators for the stock are Bearish and S&P gives A a positive 4 STAR (out of 5) buy rating. A appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '10 25 covered call (A AE) for a net debit in the $23.75 area. That is also the break even stock price for this trade. This covered call has a 78 day duration, provides 7.70% downside protection and a 5.26% assigned return rate for a 24.63% 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 A Jan '11 10 Call (OAE AB) and selling the Jan '10 25 call (A AE) for a $13.97 debit. The trade has a 78 day life and would provide 6.84% downside protection and a 7.37% assigned return rate for a 35.00% annualized return rate (for comparison purposes only). Agilent does not pay dividends at this time. [FBB-Seven Summits Research]

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