Fifth Third Bancorp (FITB) 11/19/09 PriceWatch Alert Support At Around $9.70

Posted: Thursday, November 19, 2009 8:08 AM EDT
By: Market Intelligence Center Staff

Fifth Third Bancorp (NasdaqNM: FITB) closed yesterday at $10.16. So far the stock has hit a 52-week low of $1.01 and 52-week high of $11.20. Fifth Third Bancorp stock has been showing support around 9.70 and resistance in the 10.42 range. Technical indicators for the stock are Bullish and S&P gives FITB a neutral 3 STAR (out of 5) hold rating. FITB appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a May '10 9 covered call (FTQ EI) for a net debit in the $8.12 area. That is also the break even stock price for this trade. This covered call has an 184 day duration, provides 20.08% downside protection and a 10.84% assigned return rate for a 21.50% 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 FITB Jan '11 5 Call (OJH AA) and selling the May '10 9 call (FTQ EI) for a $3.51 debit. The trade has an 184 day life and would provide 16.24% downside protection and a 13.96% assigned return rate for a 28.00% annualized return rate (for comparison purposes only). Fifth Third Bancorp has a current annual dividend yield of 0.41%. [THA-Seven Summits Research]