Kohls (KSS) 11/9/09 PriceWatch Alert Bullish Price Movement

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

Kohls (NYSE: KSS) ended the last trading session at $56.68. So far the stock has hit a 52-week low of $24.28 and 52-week high of $60.89. Kohls stock has been showing support around 54.52 and resistance in the 57.90 range. Technical indicators for the stock are Bullish and S&P gives KSS a positive 4 STAR (out of 5) buy rating. KSS appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Jan '10 55 covered call (KSS AK) for a net debit in the $52.48 area. That is also the break even stock price for this trade. This covered call has a 68 day duration, provides 7.41% downside protection and a 4.80% assigned return rate for a 25.77% 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 KSS Jan '11 30 Call (OSS AF) and selling the Jan '10 55 call (KSS AK) for a $23.50 debit. The trade has a 68 day life and would provide 5.61% downside protection and a 6.38% assigned return rate for a 34.00% annualized return rate (for comparison purposes only). Kohls does not pay dividends at this time. [ABR-Seven Summits Research]