Family Dollar Stores (FDO) 11/3/09 PriceWatch Alert With $26.37 Break Even

Posted: Tuesday, November 03, 2009 8:35 AM EDT

Family Dollar Stores (NYSE: FDO) closed yesterday at $28.72. So far the stock has hit a 52-week low of $21.79 and 52-week high of $35.00. Family Dollar Stores stock has been showing support around 27.94 and resistance in the 29.14 range. Technical indicators for the stock are Bearish and S&P gives FDO a very positive 5 STAR (out of 5) strong buy rating. FDO appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '10 27.50 covered call (FDO AY) for a net debit in the $26.37 area. That is also the break even stock price for this trade. This covered call has a 74 day duration, provides 8.18% downside protection and a 4.29% assigned return rate for a 21.14% annualized return rate (comparison purposes only). Family Dollar Stores has a current annual dividend yield of 1.87%. [ATU-Seven Summits Research]

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