SunPower Corporation (SPWRA) 11/9/09 PriceWatch Alert Up To 19.63% Return

Posted: Monday, November 09, 2009 8:10 AM EDT
By: Market Intelligence Center Staff

SunPower Corporation (NasdaqNM: SPWRA) ended the last trading session at $26.60. 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 25.73 and resistance in the 27.13 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 Jun '10 22.50 covered call (QRU FY) for a net debit in the $20.10 area. That is also the break even stock price for this trade. This covered call has a 222 day duration, provides 24.44% downside protection and an 11.94% assigned return rate for a 19.63% 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 Jun '10 22.50 call (QRU FY) for a $10.50 debit. The trade has a 222 day life and would provide 22.93% downside protection and a 19.05% assigned return rate for a 31.00% annualized return rate (for comparison purposes only). SunPower does not pay dividends at this time. [ABR-Seven Summits Research]