CONSOL Energy (CNX) 11/20/09 PriceWatch Alert Support At Around $45.86

Posted: Friday, November 20, 2009 8:47 AM EDT
By: Market Intelligence Center Staff

CONSOL Energy (NYSE: CNX) closed yesterday at $47.55. So far the stock has hit a 52-week low of $18.50 and 52-week high of $53.04. CONSOL Energy stock has been showing support around 45.86 and resistance in the 49.76 range. Technical indicators for the stock are Bullish and S&P gives CNX a neutral 3 STAR (out of 5) hold rating. CNX appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '10 46 covered call (SDF AF) for a net debit in the $43.15 area. That is also the break even stock price for this trade. This covered call has a 57 day duration, provides 9.25% downside protection and a 6.60% assigned return rate for a 42.29% 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 CNX Jan '11 17.50 Call (VTL AW) and selling the Jan '10 46 call (SDF AF) for a $26.20 debit. The trade has a 57 day life and would provide 8.10% downside protection and an 8.78% assigned return rate for a 56.00% annualized return rate (for comparison purposes only). CONSOL Energy has a current annual dividend yield of 0.80%. [FBB-Seven Summits Research]