NVIDIA (NVDA) 11/3/09 PriceWatch Alert Support At Around $11.44

Posted: Tuesday, November 03, 2009 8:33 AM EDT
By: Market Intelligence Center Staff

NVIDIA (NasdaqNM: NVDA) closed yesterday at $12.07. So far the stock has hit a 52-week low of $5.75 and 52-week high of $16.58. NVIDIA stock has been showing support around 11.44 and resistance in the 12.64 range. Technical indicators for the stock are Bearish and S&P gives NVDA a neutral 3 STAR (out of 5) hold rating. NVDA appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jun '10 10 covered call (UVA FB) for a net debit in the $9.02 area. That is also the break even stock price for this trade. This covered call has a 228 day duration, provides 25.27% downside protection and a 10.86% assigned return rate for a 17.39% 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 NVDA Jan '11 2.50 Call (OLI AZ) and selling the Jun '10 10 call (UVA FB) for a $6.85 debit. The trade has a 228 day life and would provide 22.54% downside protection and a 9.49% assigned return rate for a 15.00% annualized return rate (for comparison purposes only). NVIDIA does not pay dividends at this time. [ATU-Seven Summits Research]