Citrix Systems (CTXS) 11/20/09 PriceWatch Alert With Support Around $37.11

Posted: Friday, November 20, 2009 8:45 AM EDT
By: Market Intelligence Center Staff

Citrix Systems (NasdaqNM: CTXS) closed yesterday at $38.11. So far the stock has hit a 52-week low of $20.00 and 52-week high of $43.78. Citrix Systems stock has been showing support around 37.11 and resistance in the 39.51 range. Technical indicators for the stock are Bearish and S&P gives CTXS a weak 2 STAR (out of 5) sell rating. CTXS appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Mar '10 40 covered call (XSQ CH) for a net debit in the $35.86 area. That is also the break even stock price for this trade. This covered call has a 120 day duration, provides 5.90% downside protection and an 11.54% assigned return rate for a 35.12% 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 CTXS Jan '11 20 Call (OKX AD) and selling the Mar '10 40 call (XSQ CH) for a $16.80 debit. The trade has a 120 day life and would provide 3.44% downside protection and a 19.05% assigned return rate for a 58.00% annualized return rate (for comparison purposes only). Citrix Systems does not pay dividends at this time. [FBB-Seven Summits Research]