Reynolds American (RAI) 11/3/09 PriceWatch Alert With $43.98 Break Even
Posted: Tuesday, November 03, 2009 8:33 AM EDT
By: Market Intelligence Center Staff
Reynolds American (NYSE: RAI) closed yesterday at $48.38. So far the stock has hit a 52-week low of $31.55 and 52-week high of $50.00. Reynolds American stock has been showing support around 47.76 and resistance in the 48.96 range. Technical indicators for the stock are Bullish and S&P gives RAI a positive 4 STAR (out of 5) buy rating. RAI appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a May '10 45 covered call (RAI EI) for a net debit in the $43.98 area. That is also the break even stock price for this trade. This covered call has a 200 day duration, provides 9.09% downside protection and a 2.32% assigned return rate for a 4.23% annualized return rate (comparison purposes only). Reynolds American has a current annual dividend yield of 6.99%. [ATU-Seven Summits Research]
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