China Telecom (CHA) 11/6/09 PriceWatch Alert With 6.30% Downside Protection

Posted: Friday, November 06, 2009 8:36 AM EDT

China Telecom (NYSE: CHA) closed yesterday at $45.25. So far the stock has hit a 52-week low of $28.36 and 52-week high of $56.41. China Telecom stock has been showing support around 44.29 and resistance in the 45.73 range. Technical indicators for the stock are Bearish and S&P gives CHA a neutral 3 STAR (out of 5) hold rating. CHA appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '10 45 covered call (CHA AI) for a net debit in the $42.40 area. That is also the break even stock price for this trade. This covered call has a 71 day duration, provides 6.30% downside protection and a 6.13% assigned return rate for a 31.52% annualized return rate (comparison purposes only). China Telecom has a current annual dividend yield of 2.22%. [FBB-Seven Summits Research]

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