CBS (CBS) 11/20/09 PriceWatch Alert Support Down To $12.91

Posted: Friday, November 20, 2009 8:31 AM EDT
By: Market Intelligence Center Staff

CBS (NYSE: CBS) closed yesterday at $13.31. So far the stock has hit a 52-week low of $3.06 and 52-week high of $14.04. CBS stock has been showing support around 12.91 and resistance in the 13.79 range. Technical indicators for the stock are Bullish and S&P gives CBS a weak 2 STAR (out of 5) sell rating. CBS appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Jun '10 11 covered call (CBS FS) for a net debit in the $9.91 area. That is also the break even stock price for this trade. This covered call has a 211 day duration, provides 25.54% downside protection and an 11.00% assigned return rate for a 19.03% 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 CBS Jan '11 5 Call (ZCB AA) and selling the Jun '10 11 call (CBS FS) for a $5.15 debit. The trade has a 211 day life and would provide 23.74% downside protection and a 16.50% assigned return rate for a 29.00% annualized return rate (for comparison purposes only). CBS has a current annual dividend yield of 1.44%. [FBB-Seven Summits Research]