Diana Shipping (DSX) 11/19/09 PriceWatch Alert With Support Around $17.14

Posted: Thursday, November 19, 2009 8:30 AM EDT
By: Market Intelligence Center Staff

Diana Shipping (NYSE: DSX) closed yesterday at $17.97. So far the stock has hit a 52-week low of $6.85 and 52-week high of $19.00. Diana Shipping stock has been showing support around 17.14 and resistance in the 18.66 range. Technical indicators for the stock are Bullish. DSX appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Jun '10 15 covered call (DSX FC) for a net debit in the $13.67 area. That is also the break even stock price for this trade. This covered call has a 212 day duration, provides 23.93% downside protection and a 9.73% assigned return rate for a 16.75% 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 DSX Jan '11 7.50 Call (XDJ AU) and selling the Jun '10 15 call (DSX FC) for a $6.70 debit. The trade has a 212 day life and would provide 20.98% downside protection and an 11.94% assigned return rate for a 21.00% annualized return rate (for comparison purposes only). Diana Shipping has a current annual dividend yield of 5.64%. [THA-Seven Summits Research]