SunPower Corporation (SPWRA) 11/6/09 PriceWatch Alert Support At Around $25.72

Posted: Friday, November 06, 2009 8:42 AM EDT
By: Market Intelligence Center Staff

SunPower Corporation (NasdaqNM: SPWRA) closed yesterday at $26.65. So far the stock has hit a 52-week low of $18.50 and 52-week high of $46.30. SunPower stock has been showing support around 25.72 and resistance in the 27.26 range. Technical indicators for the stock are Bearish and S&P gives SPWRA a neutral 3 STAR (out of 5) hold rating. SPWRA appears on the Investors Observer Stocks In The News list. Deutsche Securities upgraded SPWRA Thursday to Buy from Hold. For a hedged play on this stock, look at a Mar '10 23 covered call (QRU CE) for a net debit in the $21.45 area. That is also the break even stock price for this trade. This covered call has a 134 day duration, provides 19.51% downside protection and a 7.23% assigned return rate for a 19.68% 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 SPWRA Jan '11 10 Call (ZZR AB) and selling the Mar '10 23 call (QRU CE) for an $11.95 debit. The trade has a 134 day life and would provide 17.64% downside protection and an 8.79% assigned return rate for a 24.00% annualized return rate (for comparison purposes only). SunPower does not pay dividends at this time. [FBB-Seven Summits Research]