May 09, 2013 (Marketintelligencecenter.com via COMTEX) -- Technology Spdr (AMEX:XLK) closed Wednesday's trading session at $31.59. In the past year, the ETF has hit a 52-week low of $27.04 and 52-week high of $31.74. Technology Spdr (XLK) has been showing support around $31.13 and resistance in the $31.83 range. Technical indicators for the ETF are Bullish. For a hedged play on Technology Spdr (XLK), look at the Dec '13 $32.00 covered call for a net debit in the $30.52 area. That is also the break-even price for this trade. This covered call has a duration of 226 days, provides 3.39% downside protection and an assigned return rate of 4.85% for an annualized return rate of 7.83% (for comparison purposes only). A lower-cost hedged play for Technology Spdr (XLK) would use a longer term call option in place of the covered call ETF purchase. To use this strategy look at going long the Technology Spdr (XLK) Jan '14 $30.00 call and selling the Dec '13 $32.00 call for a total debit of $1.31. The trade has a lifespan of 226 days and would provide 0.89% downside protection and an assigned return rate of 52.67% for an annualized return rate of 85% (for comparison purposes only). Technology Spdr (XLK) has a current trailing average distribution yield of 0%.
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As of Sunday, 05-05-2013 23:59, the latest Comtex SmarTrendA? Alert,
an automated pattern recognition system, indicated a DOWNTREND on
05-08-2012 for XLK @ $28.75.
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