Nalco Holding (NLC) 11/3/09 PriceWatch Alert Targets 17.76% Return

Posted: Tuesday, November 03, 2009 8:37 AM EDT

Nalco Holding (NYSE: NLC) closed yesterday at $21.20. So far the stock has hit a 52-week low of $7.80 and 52-week high of $23.13. Nalco stock has been showing support around 20.43 and resistance in the 22.23 range. Technical indicators for the stock are Bullish and S&P gives NLC a neutral 3 STAR (out of 5) hold rating. NLC appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Mar '10 20 covered call (NLC CD) for a net debit in the $18.75 area. That is also the break even stock price for this trade. This covered call has a 137 day duration, provides 11.56% downside protection and a 6.67% assigned return rate for a 17.76% annualized return rate (comparison purposes only). Nalco has a current annual dividend yield of 0.64%. [ATU-Seven Summits Research]

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