May 14, 2013 (Marketintelligencecenter.com via COMTEX) -- KB Home (NYSE:KBH) closed Monday's trading session at $24.39. 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 $23.97 and resistance in the $24.81 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 $22.00 covered call for a net debit in the $20.39 area. That is also the break-even stock price for this trade. This covered call has a duration of 158 days, provides 16.40% downside protection and an assigned return rate of 7.90% for an annualized return rate of 18.24% (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 $16.00 call and selling the Oct '13 $22.00 call for a total debit of $4.90. The trade has a lifespan of 158 days and would provide 14.31% downside protection and an assigned return rate of 22.45% for an annualized return rate of 52% (for comparison purposes only). KB Home (KBH) has a current annual dividend yield of 0.41%.
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As of Friday, 05-10-2013 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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