American Tower (AMT) 11/3/09 PriceWatch Alert Support At Around $35.96

Posted: Tuesday, November 03, 2009 8:29 AM EDT

American Tower (NYSE: AMT) closed yesterday at $37.13. So far the stock has hit a 52-week low of $19.35 and 52-week high of $40.54. American Tower stock has been showing support around 35.96 and resistance in the 38.30 range. Technical indicators for the stock are Bullish and S&P gives AMT a very positive 5 STAR (out of 5) strong buy rating. AMT appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '10 37.50 covered call (AMT AU) for a net debit in the $35.13 area. That is also the break even stock price for this trade. This covered call has a 74 day duration, provides 5.39% downside protection and a 6.75% assigned return rate for a 33.28% 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 AMT Jan '11 20 Call (VXK AD) and selling the Jan '10 37.50 call (AMT AU) for a $15.85 debit. The trade has a 74 day life and would provide 3.45% downside protection and a 10.41% assigned return rate for a 51.00% annualized return rate (for comparison purposes only). American Tower does not pay dividends at this time. [ATU-Seven Summits Research]

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