Ralcorp Holdings Inc. (RAH) 11/4/09 PriceWatch Alert Could Hit 19.58% Return

Posted: Wednesday, November 04, 2009 8:35 AM EDT

Ralcorp Holdings Inc. (NYSE: RAH) closed yesterday at $54.21. So far the stock has hit a 52-week low of $50.81 and 52-week high of $71.45. Ralcorp Holdings stock has been showing support around 53.35 and resistance in the 54.73 range. Technical indicators for the stock are Bearish and S&P gives RAH a neutral 3 STAR (out of 5) hold rating. RAH appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at a Mar '10 55 covered call (RAH CK) for a net debit in the $51.26 area. That is also the break even stock price for this trade. This covered call has a 136 day duration, provides 5.44% downside protection and a 7.30% assigned return rate for a 19.58% annualized return rate (comparison purposes only). Ralcorp Holdings does not pay dividends at this time. [WBA-Seven Summits Research]

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