SanDisk (SNDK) 11/20/09 PriceWatch Alert Support Down To $19.46

Posted: Friday, November 20, 2009 8:08 AM EDT
By: Market Intelligence Center Staff

SanDisk (NasdaqNM: SNDK) closed yesterday at $20.12. So far the stock has hit a 52-week low of $5.07 and 52-week high of $24.61. SanDisk stock has been showing support around 19.46 and resistance in the 21.20 range. Technical indicators for the stock are Bearish and S&P gives SNDK a neutral 3 STAR (out of 5) hold rating. SNDK appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Apr '10 17 covered call (SWQ DI) for a net debit in the $15.57 area. That is also the break even stock price for this trade. This covered call has a 148 day duration, provides 22.61% downside protection and a 9.18% assigned return rate for a 22.65% 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 SNDK Jan '11 5 Call (OWS AA) and selling the Apr '10 17 call (SWQ DI) for an $11.05 debit. The trade has a 148 day life and would provide 20.23% downside protection and an 8.60% assigned return rate for a 21.00% annualized return rate (for comparison purposes only). SanDisk does not pay dividends at this time. [FBB-Seven Summits Research]