Agilent Technologies Inc. (A) 11/6/09 PriceWatch Alert Down To $23.93 Break Even

Posted: Friday, November 06, 2009 8:08 AM EDT
By: Market Intelligence Center Staff

Agilent Technologies Inc. (NYSE: A) closed yesterday at $26.13. So far the stock has hit a 52-week low of $12.02 and 52-week high of $29.38. Agilent stock has been showing support around 24.98 and resistance in the 26.76 range. Technical indicators for the stock are Bullish and S&P gives A a positive 4 STAR (out of 5) buy rating. A appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '10 25 covered call (A AE) for a net debit in the $23.93 area. That is also the break even stock price for this trade. This covered call has a 71 day duration, provides 8.42% downside protection and a 4.47% assigned return rate for a 22.99% 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 A Jan '11 10 Call (OAE AB) and selling the Jan '10 25 call (A AE) for a $14.05 debit. The trade has a 71 day life and would provide 7.96% downside protection and a 6.76% assigned return rate for a 35.00% annualized return rate (for comparison purposes only). Agilent does not pay dividends at this time. [FBB-Seven Summits Research]