Blackstone Group LP (BX) 11/6/09 PriceWatch Alert Technicals Showing Bearish

Posted: Friday, November 06, 2009 8:39 AM EDT
By: Market Intelligence Center Staff

Blackstone Group LP (NYSE: BX) closed yesterday at $13.87. So far the stock has hit a 52-week low of $3.55 and 52-week high of $17.22. Blackstone Group stock has been showing support around 12.71 and resistance in the 14.57 range. Technical indicators for the stock are Bearish. BX appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Jun '10 12 covered call (BX FG) for a net debit in the $10.67 area. That is also the break even stock price for this trade. This covered call has a 225 day duration, provides 23.07% downside protection and a 12.46% assigned return rate for a 20.22% 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 BX Jan '11 7.50 Call (XJM AU) and selling the Jun '10 12 call (BX FG) for a $3.40 debit. The trade has a 225 day life and would provide 21.41% downside protection and a 32.35% assigned return rate for a 52.00% annualized return rate (for comparison purposes only). Blackstone Group has a current annual dividend yield of 8.63%. [FBB-Seven Summits Research]