Agilent Technologies Inc. (A) 11/18/09 PriceWatch Alert Up To 8.39% Return

Posted: Wednesday, November 18, 2009 8:37 AM EDT
By: Market Intelligence Center Staff

Agilent Technologies Inc. (NYSE: A) closed yesterday at $29.63. So far the stock has hit a 52-week low of $12.02 and 52-week high of $29.71. Agilent stock has been showing support around 28.80 and resistance in the 30.12 range. Technical indicators for the stock are Bullish and S&P gives A a positive 4 STAR (out of 5) buy rating. A appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a May '10 25 covered call (A EE) for a net debit in the $23.98 area. That is also the break even stock price for this trade. This covered call has an 185 day duration, provides 19.07% downside protection and a 4.25% assigned return rate for an 8.39% 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 A Jan '11 17.50 Call (OAE AW) and selling the May '10 25 call (A EE) for a $7.05 debit. The trade has an 185 day life and would provide 17.14% downside protection and a 6.38% assigned return rate for a 13.00% annualized return rate (for comparison purposes only). Agilent does not pay dividends at this time. [WBA-Seven Summits Research]