Potential Wells Fargo (WFC) Trade Has $30.73 Breakeven

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Feb 11, 2013 (Marketintelligencecenter.com via COMTEX) -- Wells Fargo & Co (NYSE:WFC) closed Friday's trading session at $34.88. In the past year, the stock has hit a 52-week low of $29.80 and 52-week high of $36.60. Wells Fargo (WFC) stock has been showing support around $34.59 and resistance in the $35.07 range. Technical indicators for the stock are Bullish and S&P gives Wells Fargo (WFC) a neutral 3 STARS (out of 5) hold rating. For a hedged play on Wells Fargo (WFC), look at the Jan '14 $32.00 covered call for a net debit in the $30.73 area. That is also the break-even stock price for this trade. This covered call has a duration of 341 days, provides 11.90% downside protection and an assigned return rate of 4.13% for an annualized return rate of 4.42% (for comparison purposes only). A lower-cost hedged play for Wells Fargo (WFC) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the Wells Fargo (WFC) Jan '14 $30.00 call and selling the Jan '14 $32.00 call for a total debit of $1.55. The trade has a lifespan of 341 days and would provide 9.55% downside protection and an assigned return rate of 29.03% for an annualized return rate of 31% (for comparison purposes only). Wells Fargo (WFC) has a current annual dividend yield of 2.86%.

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As of Thursday, 02-07-2013 23:59, the latest Comtex SmarTrendA? Alert,
an automated pattern recognition system, indicated a DOWNTREND on
04-23-2012 for WFC @ $32.60.

For more information on SmarTrend, contact your market data
provider or go to www.mysmartrend.com

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