Oracle (ORCL) Trading Near $34.97 Resistance Level

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Jan 10, 2013 ( via COMTEX) -- Oracle Corp (NASDAQ:ORCL) closed Wednesday's trading session at $34.46. In the past year, the stock has hit a 52-week low of $25.33 and 52-week high of $34.80. Oracle (ORCL) stock has been showing support around $34.13 and resistance in the $34.97 range. Technical indicators for the stock are Bullish and S&P gives Oracle (ORCL) a neutral 3 STARS (out of 5) hold rating. For a hedged play on Oracle (ORCL), look at the Jun '13 $33.00 covered call for a net debit in the $31.53 area. That is also the break-even stock price for this trade. This covered call has a duration of 163 days, provides 8.50% downside protection and an assigned return rate of 4.66% for an annualized return rate of 10.44% (for comparison purposes only). A lower-cost hedged play for Oracle (ORCL) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the Oracle (ORCL) Jan '14 $20.00 call and selling the Jun '13 $33.00 call for a total debit of $11.92. The trade has a lifespan of 163 days and would provide 7.37% downside protection and an assigned return rate of 9.06% for an annualized return rate of 20% (for comparison purposes only). Oracle (ORCL) has a current annual dividend yield of 0.70%.

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