Illumina (ILMN) 11/6/09 PriceWatch Alert Support At Around $31.99

Posted: Friday, November 06, 2009 8:47 AM EDT
By: Market Intelligence Center Staff

Illumina (NasdaqNM: ILMN) closed yesterday at $33.04. So far the stock has hit a 52-week low of $18.82 and 52-week high of $44.07. Illumina stock has been showing support around 31.99 and resistance in the 34.05 range. Technical indicators for the stock are Bearish and S&P gives ILMN a positive 4 STAR (out of 5) buy rating. ILMN appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at a Jan '10 30 covered call (IQA AF) for a net debit in the $28.94 area. That is also the break even stock price for this trade. This covered call has a 71 day duration, provides 12.41% downside protection and a 3.66% assigned return rate for an 18.83% 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 ILMN Jan '11 10 Call (ZYC AB) and selling the Jan '10 30 call (IQA AF) for a $19.45 debit. The trade has a 71 day life and would provide 10.87% downside protection and a 2.83% assigned return rate for a 15.00% annualized return rate (for comparison purposes only). Illumina does not pay dividends at this time. [FBB-Seven Summits Research]