Exxon Mobil (XOM) 11/2/09 PriceWatch Alert Support At Around $69.41

Posted: Monday, November 02, 2009 8:43 AM EDT
By: Market Intelligence Center Staff

Exxon Mobil (NYSE: XOM) ended the last trading session at $71.67. So far the stock has hit a 52-week low of $61.86 and 52-week high of $83.64. Exxon Mobil stock has been showing support around 69.41 and resistance in the 74.95 range. Technical indicators for the stock are Bullish and S&P gives XOM a very positive 5 STAR (out of 5) strong buy rating. XOM appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Jan '10 70 covered call (XOM AN) for a net debit in the $67.67 area. That is also the break even stock price for this trade. This covered call has a 75 day duration, provides 5.58% downside protection and a 3.44% assigned return rate for a 16.76% 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 XOM Jan '11 45 Call (ODU AI) and selling the Jan '10 70 call (XOM AN) for a $23.00 debit. The trade has a 75 day life and would provide 5.12% downside protection and an 8.70% assigned return rate for a 42.00% annualized return rate (for comparison purposes only). Exxon Mobil has a current annual dividend yield of 2.28%. [ABR-Seven Summits Research]