Green Mountain Coffee Roasters (GMCR) Could Break Through $39.28 Resistance Level

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Dec 10, 2012 ( via COMTEX) -- Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) closed Friday's trading session at $37.85. In the past year, the stock has hit a 52-week low of $17.11 and 52-week high of $71.15. Green Mountain Coffee Roasters (GMCR) stock has been showing support around $36.48 and resistance in the $39.28 range. Technical indicators for the stock are Bullish. For a hedged play on Green Mountain Coffee Roasters (GMCR), look at the Mar '13 $34.00 covered call for a net debit in the $31.05 area. That is also the break-even stock price for this trade. This covered call has a duration of 96 days, provides 17.97% downside protection and an assigned return rate of 9.50% for an annualized return rate of 36.12% (for comparison purposes only). A lower-cost hedged play for Green Mountain Coffee Roasters (GMCR) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the Green Mountain Coffee Roasters (GMCR) Jan '14 $18.00 call and selling the Mar '13 $34.00 call for a total debit of $13.20. The trade has a lifespan of 96 days and would provide 17.57% downside protection and an assigned return rate of 21.21% for an annualized return rate of 81% (for comparison purposes only). Green Mountain Coffee Roasters (GMCR) has a current trailing average dividend yield of 0%.

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