Gold Fields (GFI) PriceWatch Alert for November 20, 2009

Posted: Friday, November 20, 2009 8:34 AM EDT
By: Market Intelligence Center Staff

Gold Fields (NYSE: GFI) closed yesterday at $14.68. So far the stock has hit a 52-week low of $5.20 and 52-week high of $15.24. Gold Fields stock has been showing support around 13.70 and resistance in the 15.22 range. Technical indicators for the stock are Bullish. GFI appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Apr '10 13 covered call (GFI DM) for a net debit in the $11.98 area. That is also the break even stock price for this trade. This covered call has a 148 day duration, provides 18.39% downside protection and an 8.51% assigned return rate for a 21.00% 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 GFI Jan '11 5 Call (ZIS AA) and selling the Apr '10 13 call (GFI DM) for a $6.90 debit. The trade has a 148 day life and would provide 18.94% downside protection and a 15.94% assigned return rate for a 39.00% annualized return rate (for comparison purposes only). Gold Fields has a current annual dividend yield of 0.90%. [FBB-Seven Summits Research]