SunPower (SPWR) PriceWatch Alert Up To 74.17% Return

Posted: Monday, September 29, 2008 8:07 AM EDT
By: Market Intelligence Center Staff

SunPower (NasdaqNM: SPWR) ended the last trading session at $83.16. 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 75.17 and resistance in the 97.91 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 Dec '08 85 covered call (QSU LQ) for a net debit in the $72.86 area. That is also the break even stock price for this trade. This covered call has an 82 day duration, provides 12.39% downside protection and a 16.66% assigned return rate for a 74.17% 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 30 Call (LMO AF) and selling the Dec '08 85 call (QSU LQ) for a $43.00 debit. The trade has an 82 day life and would provide 12.22% downside protection and a 27.91% assigned return rate for a 124.00% 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]