Altera (ALTR) 11/20/09 PriceWatch Alert Bullish Price Movement

Posted: Friday, November 20, 2009 8:37 AM EDT
By: Market Intelligence Center Staff

Altera (NasdaqNM: ALTR) closed yesterday at $20.80. So far the stock has hit a 52-week low of $12.99 and 52-week high of $22.15. Altera stock has been showing support around 20.29 and resistance in the 21.15 range. Technical indicators for the stock are Bullish and S&P gives ALTR a positive 4 STAR (out of 5) buy rating. ALTR appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jun '10 21 covered call (LTQ FU) for a net debit in the $18.80 area. That is also the break even stock price for this trade. This covered call has a 211 day duration, provides 9.62% downside protection and an 11.70% assigned return rate for a 20.24% 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 ALTR Jan '11 15 Call (VZT AC) and selling the Jun '10 21 call (LTQ FU) for a $4.75 debit. The trade has a 211 day life and would provide 5.05% downside protection and a 26.32% assigned return rate for a 46.00% annualized return rate (for comparison purposes only). Altera has a current annual dividend yield of 0.93%. [FBB-Seven Summits Research]