CurrencyShares Euro Trust (FXE) 11/9/09 PriceWatch Alert Technicals Showing Bullish

Posted: Monday, November 09, 2009 8:05 AM EDT
By: Market Intelligence Center Staff

CurrencyShares Euro Trust (PCX: FXE) ended the last trading session at $148.30. So far FXE has hit a 52-week low of $124.59 and 52-week high of $150.31. FXE has been showing support around 147.65 and resistance in the 149.27 range. Technical indicators are Bullish. FXE appears on the Investors Observer Select ETF and HOLDR list. For a hedged play on this stock, look at a Mar '10 148 covered call (FXE CR) for a net debit in the $144.00 area. That is also the break even stock price for this trade. This covered call has a 131 day duration, provides 2.90% downside protection and a 2.78% assigned return rate for a 7.74% 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 FXE Jan '11 115 Call (XXF AK) and selling the Mar '10 148 call (FXE CR) for a $30.40 debit. The trade has a 131 day life and would provide 1.96% downside protection and an 8.55% assigned return rate for a 24.00% annualized return rate (for comparison purposes only). [ABR-Seven Summits Research]