Agilent Technologies Inc. (A) 11/4/09 PriceWatch Alert Bearish Price Movement

Posted: Wednesday, November 04, 2009 8:32 AM EDT
By: Market Intelligence Center Staff

Agilent Technologies Inc. (NYSE: A) closed yesterday at $25.03. So far the stock has hit a 52-week low of $12.02 and 52-week high of $29.38. Agilent stock has been showing support around 24.55 and resistance in the 25.43 range. Technical indicators for the stock are Bearish and S&P gives A a positive 4 STAR (out of 5) buy rating. A appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a May '10 25 covered call (A EE) for a net debit in the $22.34 area. That is also the break even stock price for this trade. This covered call has a 199 day duration, provides 10.75% downside protection and an 11.91% assigned return rate for a 21.84% 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 A Jan '11 15 Call (OAE AC) and selling the May '10 25 call (A EE) for an $8.31 debit. The trade has a 199 day life and would provide 6.87% downside protection and a 20.34% assigned return rate for a 37.00% annualized return rate (for comparison purposes only). Agilent does not pay dividends at this time. [WBA-Seven Summits Research]