Halliburton (HAL) PriceWatch Alert for November 18, 2009

Posted: Wednesday, November 18, 2009 8:42 AM EDT
By: Market Intelligence Center Staff

Halliburton (NYSE: HAL) closed yesterday at $31.75. So far the stock has hit a 52-week low of $12.80 and 52-week high of $32.00. Halliburton stock has been showing support around 30.90 and resistance in the 32.38 range. Technical indicators for the stock are Bullish and S&P gives HAL a neutral 3 STAR (out of 5) hold rating. HAL appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at an Apr '10 32 covered call (HZL DE) for a net debit in the $28.75 area. That is also the break even stock price for this trade. This covered call has a 150 day duration, provides 9.45% downside protection and an 11.30% assigned return rate for a 27.51% 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 HAL Jan '11 20 Call (VHW AD) and selling the Apr '10 32 call (HZL DE) for a $9.70 debit. The trade has a 150 day life and would provide 6.46% downside protection and a 23.71% assigned return rate for a 58.00% annualized return rate (for comparison purposes only). Halliburton has a current annual dividend yield of 1.17%. [WBA-Seven Summits Research]