May 08, 2013 (Marketintelligencecenter.com via COMTEX) -- D.R. Horton Inc. (NYSE:DHI) closed Tuesday's trading session at $26.75. In the past year, the stock has hit a 52-week low of $14.37 and 52-week high of $27.32. D R Horton (DHI) stock has been showing support around $26.24 and resistance in the $27.10 range. Technical indicators for the stock are Bullish and S&P gives D R Horton (DHI) a neutral 3 STARS (out of 5) hold rating. For a hedged play on D R Horton (DHI), look at the Aug '13 $25.00 covered call for a net debit in the $23.88 area. That is also the break-even stock price for this trade. This covered call has a duration of 101 days, provides 10.73% downside protection and an assigned return rate of 4.69% for an annualized return rate of 16.95% (for comparison purposes only). A lower-cost hedged play for D R Horton (DHI) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the D R Horton (DHI) Jan '14 $17.00 call and selling the Aug '13 $25.00 call for a total debit of $7.18. The trade has a lifespan of 101 days and would provide 9.61% downside protection and an assigned return rate of 11.42% for an annualized return rate of 41% (for comparison purposes only). D R Horton (DHI) has a current annual dividend yield of 0.43%.
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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
06-04-2012 for DHI @ $14.81.
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