Watsco (WSO) In Tight Support/Resistance Range With Neutral S&P Rating

Posted: Thursday, November 12, 2009 9:03 AM EDT

Watsco (NYSE: WSO) closed yesterday at $52.65. So far the stock has hit a 52-week low of $29.34 and 52-week high of $57.63. Watsco stock has been showing support around 51.37 and resistance in the 54.13 range. Technical indicators for the stock are Bullish and S&P gives WSO a neutral 3 STAR (out of 5) hold rating. WSO appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Feb '10 50 covered call (WSO BJ) for a net debit in the $48.05 area. That is also the break even stock price for this trade. This covered call has a 100 day duration, provides 8.74% downside protection and a 4.06% assigned return rate for a 14.81% annualized return rate (comparison purposes only). Watsco has a current annual dividend yield of 3.63%. [THA-Seven Summits Research]

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