May 13, 2013 (Marketintelligencecenter.com via COMTEX) -- Cheesecake Factory Inc (NASDAQ:CAKE) closed Friday's trading session at $40.40. In the past year, the stock has hit a 52-week low of $29.44 and 52-week high of $41.02. Cheesecake Factory (CAKE) stock has been showing support around $39.85 and resistance in the $40.73 range. Technical indicators for the stock are Bullish and S&P gives Cheesecake Factory (CAKE) a weak 2 STARS (out of 5) sell rating. For a hedged play on Cheesecake Factory (CAKE), look at the Jul '13 $41.00 covered call for a net debit in the $39.30 area. That is also the break-even stock price for this trade. This covered call has a duration of 68 days, provides 2.72% downside protection and an assigned return rate of 4.33% for an annualized return rate of 23.22% (for comparison purposes only). A lower-cost hedged play for Cheesecake Factory (CAKE) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the Cheesecake Factory (CAKE) Jan '14 $30.00 call and selling the Jul '13 $41.00 call for a total debit of $9.65. The trade has a lifespan of 68 days and would provide 1.86% downside protection and an assigned return rate of 13.99% for an annualized return rate of 75% (for comparison purposes only). Cheesecake Factory (CAKE) has a current annual dividend yield of 1.20%.
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As of Thursday, 05-09-2013 23:59, the latest Comtex SmarTrendA? Alert,
an automated pattern recognition system, indicated a DOWNTREND on
06-04-2012 for CAKE @ $30.27.
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