Marvel Entertainment (MVL) 11/6/09 PriceWatch Alert Support Down To $50.34

Posted: Friday, November 06, 2009 8:20 AM EDT

Marvel Entertainment (NYSE: MVL) closed yesterday at $51.23. So far the stock has hit a 52-week low of $22.82 and 52-week high of $51.86. Marvel Entertainment stock has been showing support around 50.34 and resistance in the 51.68 range. Technical indicators for the stock are Bullish and S&P gives MVL a neutral 3 STAR (out of 5) hold rating. MVL appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at a Mar '10 50 covered call (MVL CJ) for a net debit in the $48.78 area. That is also the break even stock price for this trade. This covered call has a 134 day duration, provides 4.78% downside protection and a 2.50% assigned return rate for a 6.81% 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 MVL Jan '11 40 Call (VTQ AH) and selling the Mar '10 50 call (MVL CJ) for a $9.15 debit. The trade has a 134 day life and would provide 4.06% downside protection and a 9.29% assigned return rate for a 25.00% annualized return rate (for comparison purposes only). Marvel Entertainment does not pay dividends at this time. [FBB-Seven Summits Research]

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