First Solar Inc. (FSLR) 11/9/09 PriceWatch Alert At $107.38 Break Even

Posted: Monday, November 09, 2009 8:25 AM EDT
By: Market Intelligence Center Staff

First Solar Inc. (NasdaqNM: FSLR) ended the last trading session at $117.93. So far the stock has hit a 52-week low of $85.28 and 52-week high of $207.51. First Solar stock has been showing support around 115.25 and resistance in the 121.71 range. Technical indicators for the stock are Bearish and S&P gives FSLR a neutral 3 STAR (out of 5) hold rating. FSLR appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '10 120 covered call (QHB AD) for a net debit in the $107.38 area. That is also the break even stock price for this trade. This covered call has a 68 day duration, provides 8.95% downside protection and an 11.75% assigned return rate for a 63.08% 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 FSLR Jan '11 50 Call (XOL AJ) and selling the Jan '10 120 call (QHB AD) for a $60.90 debit. The trade has a 68 day life and would provide 5.96% downside protection and a 14.94% assigned return rate for an 80.00% annualized return rate (for comparison purposes only). First Solar does not pay dividends at this time. [ABR-Seven Summits Research]