International Game Technology (IGT) 11/16/09 PriceWatch Alert Shows Bullish Technicals

Posted: Monday, November 16, 2009 8:40 AM EDT
By: Market Intelligence Center Staff

International Game Technology (NYSE: IGT) ended the last trading session at $20.62. So far the stock has hit a 52-week low of $6.81 and 52-week high of $23.30. International Game Technology stock has been showing support around 19.91 and resistance in the 21.07 range. Technical indicators for the stock are Bullish and S&P gives IGT a neutral 3 STAR (out of 5) hold rating. IGT appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Apr '10 19 covered call (IGT DS) for a net debit in the $17.62 area. That is also the break even stock price for this trade. This covered call has a 152 day duration, provides 14.55% downside protection and a 7.83% assigned return rate for an 18.81% 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 IGT Jan '11 10 Call (VGG AB) and selling the Apr '10 19 call (IGT DS) for a $7.95 debit. The trade has a 152 day life and would provide 12.95% downside protection and a 13.21% assigned return rate for a 32.00% annualized return rate (for comparison purposes only). International Game Technology has a current annual dividend yield of 1.17%. [ABR-Seven Summits Research]