Alexion Pharmaceuticals (ALXN) 11/6/09 PriceWatch Alert Bullish Price Movement

Posted: Friday, November 06, 2009 8:31 AM EDT
By: Market Intelligence Center Staff

Alexion Pharmaceuticals (NGM: ALXN) closed yesterday at $45.19. So far the stock has hit a 52-week low of $28.16 and 52-week high of $48.93. Alexion Pharmaceuticals stock has been showing support around 43.28 and resistance in the 46.14 range. Technical indicators for the stock are Bullish and S&P gives ALXN a positive 4 STAR (out of 5) buy rating. ALXN appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at a Jan '10 45 covered call (XQN AI) for a net debit in the $42.24 area. That is also the break even stock price for this trade. This covered call has a 71 day duration, provides 6.53% downside protection and a 6.53% assigned return rate for a 33.59% 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 ALXN Jan '11 25 Call (OAO AE) and selling the Jan '10 45 call (XQN AI) for an $18.75 debit. The trade has a 71 day life and would provide 3.19% downside protection and a 6.67% assigned return rate for a 34.00% annualized return rate (for comparison purposes only). Alexion Pharmaceuticals does not pay dividends at this time. [FBB-Seven Summits Research]