SunPower (SPWR) PriceWatch Alert Targets 79.23% Return

Posted: Friday, September 26, 2008 8:07 AM EDT
By: Market Intelligence Center Staff

SunPower (NasdaqNM: SPWR) closed yesterday at $94.84. So far the stock has hit a 52-week low of $53.18 and 52-week high of $164.49. SunPower stock has been showing support around 86.31 and resistance in the 102.47 range. Technical indicators for the stock are Bullish and S&P gives SPWR a neutral 3 STAR (out of 5) hold rating. SPWR appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Nov '08 95 covered call (QSU KS) for a net debit in the $84.54 area. That is also the break even stock price for this trade. This covered call has a 57 day duration, provides 10.86% downside protection and a 12.37% assigned return rate for a 79.23% 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 SPWR Jan '10 40 Call (LMO AH) and selling the Nov '08 95 call (QSU KS) for a $46.15 debit. The trade has a 57 day life and would provide 9.16% downside protection and a 19.18% assigned return rate for a 123.00% annualized return rate (for comparison purposes only). SunPower does not pay dividends at this time. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]