May 10, 2013 (Marketintelligencecenter.com via COMTEX) -- International Business Machines Corp (NYSE:IBM) closed Thursday's trading session at $203.24. In the past year, the stock has hit a 52-week low of $181.85 and 52-week high of $215.90. International Business Machines (IBM) stock has been showing support around $201.37 and resistance in the $205.93 range. Technical indicators for the stock are Bullish and S&P gives International Business Machines (IBM) a positive 4 STARS (out of 5) buy rating. For a hedged play on International Business Machines (IBM), look at the Jul '13 $215.00 covered call for a net debit in the $201.39 area. That is also the break-even stock price for this trade. This covered call has a duration of 71 days, provides 0.91% downside protection and an assigned return rate of 6.76% for an annualized return rate of 34.74% (for comparison purposes only). A lower-cost hedged play for International Business Machines (IBM) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the International Business Machines (IBM) Jan '14 $190.00 call and selling the Jul '13 $215.00 call for a total debit of $17.05. The trade has a lifespan of 71 days and would provide -1.87% downside protection and an assigned return rate of 46.63% for an annualized return rate of 240% (for comparison purposes only). International Business Machines (IBM) has a current annual dividend yield of 1.67%.
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As of Monday, 05-06-2013 23:59, the latest Comtex SmarTrendA? Alert,
an automated pattern recognition system, indicated a DOWNTREND on
05-17-2012 for IBM @ $199.22.
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