A T and T (T) 11/20/09 PriceWatch Alert Support Down To $25.84

Posted: Friday, November 20, 2009 8:36 AM EDT
By: Market Intelligence Center Staff

A T and T (NYSE: T) closed yesterday at $26.11. So far the stock has hit a 52-week low of $21.44 and 52-week high of $30.65. A T and T stock has been showing support around 25.84 and resistance in the 26.34 range. Technical indicators for the stock are Bullish and S&P gives T a very positive 5 STAR (out of 5) strong buy rating. T appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at an Apr '10 26 covered call (T DZ) for a net debit in the $24.70 area. That is also the break even stock price for this trade. This covered call has a 148 day duration, provides 5.40% downside protection and a 5.26% assigned return rate for a 12.98% 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 T Jan '11 20 Call (VFE AD) and selling the Apr '10 26 call (T DZ) for a $5.04 debit. The trade has a 148 day life and would provide 4.10% downside protection and a 19.05% assigned return rate for a 47.00% annualized return rate (for comparison purposes only). A T and T has a current annual dividend yield of 6.24%. [FBB-Seven Summits Research]