Comcast (CMCSK) 11/3/09 PriceWatch Alert With Support Around $13.55

Posted: Tuesday, November 03, 2009 8:46 AM EDT
By: Market Intelligence Center Staff

Comcast (NasdaqNM: CMCSK) closed yesterday at $14.04. So far the stock has hit a 52-week low of $10.33 and 52-week high of $17.58. Comcast stock has been showing support around 13.55 and resistance in the 14.49 range. Technical indicators for the stock are Bearish and S&P gives CMCSK a very weak 1 STAR (out of 5) strong sell rating. CMCSK appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at an Apr '10 13 covered call (CQK DM) for a net debit in the $12.04 area. That is also the break even stock price for this trade. This covered call has a 165 day duration, provides 14.25% downside protection and a 7.97% assigned return rate for a 17.64% 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 CMCSK Jan '11 7.50 Call (VBJ AU) and selling the Apr '10 13 call (CQK DM) for a $5.20 debit. The trade has a 165 day life and would provide 9.54% downside protection and a 5.77% assigned return rate for a 13.00% annualized return rate (for comparison purposes only). Comcast has a current annual dividend yield of 1.86%. [ATU-Seven Summits Research]