May 08, 2013 (Marketintelligencecenter.com via COMTEX) -- KB Home (NYSE:KBH) closed Tuesday's trading session at $24.67. In the past year, the stock has hit a 52-week low of $6.46 and 52-week high of $24.79. KB Home (KBH) stock has been showing support around $24.02 and resistance in the $25.02 range. Technical indicators for the stock are Bullish and S&P gives KB Home (KBH) a weak 2 STARS (out of 5) sell rating. For a hedged play on KB Home (KBH), look at the Oct '13 $23.00 covered call for a net debit in the $21.02 area. That is also the break-even stock price for this trade. This covered call has a duration of 164 days, provides 14.80% downside protection and an assigned return rate of 9.42% for an annualized return rate of 20.96% (for comparison purposes only). A lower-cost hedged play for KB Home (KBH) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the KB Home (KBH) Jan '14 $18.00 call and selling the Oct '13 $23.00 call for a total debit of $3.90. The trade has a lifespan of 164 days and would provide 11.23% downside protection and an assigned return rate of 28.21% for an annualized return rate of 63% (for comparison purposes only). KB Home (KBH) has a current annual dividend yield of 0.42%.
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As of Saturday, 05-04-2013 23:59, the latest Comtex SmarTrendA? Alert,
an automated pattern recognition system, indicated a DOWNTREND on
05-17-2012 for KBH @ $7.36.
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