MetLife (MET) 11/6/09 PriceWatch Alert With Support Around $32.43

Posted: Friday, November 06, 2009 8:33 AM EDT
By: Market Intelligence Center Staff

MetLife (NYSE: MET) closed yesterday at $33.81. So far the stock has hit a 52-week low of $11.37 and 52-week high of $41.45. MetLife stock has been showing support around 32.43 and resistance in the 34.51 range. Technical indicators for the stock are Bearish and S&P gives MET a positive 4 STAR (out of 5) buy rating. MET appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Jun '10 35 covered call (MET FG) for a net debit in the $29.41 area. That is also the break even stock price for this trade. This covered call has a 225 day duration, provides 13.01% downside protection and a 19.01% assigned return rate for a 30.83% 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 MET Jan '11 25 Call (VRA AE) and selling the Jun '10 35 call (MET FG) for a $7.25 debit. The trade has a 225 day life and would provide 4.61% downside protection and a 37.93% assigned return rate for a 62.00% annualized return rate (for comparison purposes only). MetLife has a current annual dividend yield of 2.21%. [FBB-Seven Summits Research]