Chevron (CVX) PriceWatch Alert for November 6, 2009

Posted: Friday, November 06, 2009 8:18 AM EDT

Chevron (NYSE: CVX) closed yesterday at $77.24. So far the stock has hit a 52-week low of $56.12 and 52-week high of $81.92. Chevron stock has been showing support around 75.98 and resistance in the 78.38 range. Technical indicators for the stock are Bullish and S&P gives CVX a very positive 5 STAR (out of 5) strong buy rating. CVX appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at a Mar '10 85 covered call (CVX CQ) for a net debit in the $75.75 area. That is also the break even stock price for this trade. This covered call has a 134 day duration, provides 1.93% downside protection and a 12.21% assigned return rate for a 33.26% 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 CVX Jan '11 65 Call (VCH AM) and selling the Mar '10 85 call (CVX CQ) for a $13.76 debit. The trade has a 134 day life and would provide no downside protection and a 45.35% assigned return rate for a 124.00% annualized return rate (for comparison purposes only). Chevron has a current annual dividend yield of 3.55%. [FBB-Seven Summits Research]

Click Symbol For More News On: (CVX)