May 03, 2013 (Marketintelligencecenter.com via COMTEX) -- Materials Spdr (AMEX:XLB) closed Thursday's trading session at $39.13. In the past year, the ETF has hit a 52-week low of $32.59 and 52-week high of $40.04. Materials Spdr (XLB) has been showing support around $38.46 and resistance in the $39.56 range. Technical indicators for the ETF are Bullish. For a hedged play on Materials Spdr (XLB), look at the Jun '13 $39.00 covered call for a net debit in the $38.11 area. That is also the break-even price for this trade. This covered call has a duration of 50 days, provides 2.61% downside protection and an assigned return rate of 2.34% for an annualized return rate of 17.05% (for comparison purposes only). A lower-cost hedged play for Materials Spdr (XLB) would use a longer term call option in place of the covered call ETF purchase. To use this strategy look at going long the Materials Spdr (XLB) Jan '14 $32.00 call and selling the Jun '13 $39.00 call for a total debit of $6.43. The trade has a lifespan of 50 days and would provide 1.79% downside protection and an assigned return rate of 8.86% for an annualized return rate of 65% (for comparison purposes only). Materials Spdr (XLB) has a current annual distribution yield of 2.21%.
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As of Monday, 04-29-2013 23:59, the latest Comtex SmarTrendA? Alert,
an automated pattern recognition system, indicated a DOWNTREND on
03-06-2012 for XLB @ $35.97.
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