Google (GOOG) PriceWatch Alert for November 11, 2009

Posted: Wednesday, November 11, 2009 8:11 AM EDT
By: Market Intelligence Center Staff

Google (NasdaqNM: GOOG) closed yesterday at $566.76. So far the stock has hit a 52-week low of $247.30 and 52-week high of $568.78. Google stock has been showing support around 559.07 and resistance in the 572.63 range. Technical indicators for the stock are Bullish and S&P gives GOOG a neutral 3 STAR (out of 5) hold rating. GOOG appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Jan '10 630 covered call (GOQ AF) for a net debit in the $562.06 area. That is also the break even stock price for this trade. This covered call has a 66 day duration, provides 0.83% downside protection and a 12.09% assigned return rate for a 66.85% 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 GOOG Jan '11 400 Call (OUP AU) and selling the Jan '10 630 call (GOQ AF) for an $184.60 debit. The trade has a 66 day life and would provide no downside protection and a 24.59% assigned return rate for a 136.00% annualized return rate (for comparison purposes only). Google does not pay dividends at this time. [WBA-Seven Summits Research]