Juniper Networks (JNPR) 11/20/09 PriceWatch Alert Down To $21.89 Break Even

Posted: Friday, November 20, 2009 8:44 AM EDT
By: Market Intelligence Center Staff

Juniper Networks (NYSE: JNPR) closed yesterday at $25.29. So far the stock has hit a 52-week low of $12.43 and 52-week high of $28.74. Juniper Networks stock has been showing support around 25.00 and resistance in the 25.60 range. Technical indicators for the stock are Bearish and S&P gives JNPR a neutral 3 STAR (out of 5) hold rating. JNPR appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Apr '10 24 covered call (JUX DS) for a net debit in the $21.89 area. That is also the break even stock price for this trade. This covered call has a 148 day duration, provides 13.44% downside protection and a 9.64% assigned return rate for a 23.77% 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 JNPR Jan '11 10 Call (VWQ AL) and selling the Apr '10 24 call (JUX DS) for a $12.30 debit. The trade has a 148 day life and would provide 11.82% downside protection and a 13.82% assigned return rate for a 34.00% annualized return rate (for comparison purposes only). Juniper Networks does not pay dividends at this time. [FBB-Seven Summits Research]