Covidien Ltd. (COV) 11/3/09 PriceWatch Alert Up To 5.94% Downside Protection

Posted: Tuesday, November 03, 2009 8:38 AM EDT

Covidien Ltd. (NYSE: COV) closed yesterday at $42.91. So far the stock has hit a 52-week low of $27.27 and 52-week high of $45.61. Covidien stock has been showing support around 41.90 and resistance in the 43.58 range. Technical indicators for the stock are Bullish and S&P gives COV a neutral 3 STAR (out of 5) hold rating. COV appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at a Jan '10 42.50 covered call (COV AT) for a net debit in the $40.36 area. That is also the break even stock price for this trade. This covered call has a 74 day duration, provides 5.94% downside protection and a 5.30% assigned return rate for a 26.15% annualized return rate (comparison purposes only). Covidien has a current annual dividend yield of 1.70%. [ATU-Seven Summits Research]

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