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Dec 27, 2012 (Marketintelligencecenter.com via COMTEX) -- Eli Lilly and Co (NYSE:LLY) closed Wednesday's trading session at $49.06. In the past year, the stock has hit a 52-week low of $38.30 and 52-week high of $53.99. Eli Lilly (LLY) stock has been showing support around $48.35 and resistance in the $49.59 range. Technical indicators for the stock are Bullish and S&P gives Eli Lilly (LLY) a neutral 3 STARS (out of 5) hold rating. For a hedged play on Eli Lilly (LLY), look at the Feb '13 $50.00 covered call for a net debit in the $48.12 area. That is also the break-even stock price for this trade. This covered call has a duration of 51 days, provides 1.92% downside protection and an assigned return rate of 3.91% for an annualized return rate of 27.96% (for comparison purposes only). A lower-cost hedged play for Eli Lilly (LLY) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the Eli Lilly (LLY) Jan '14 $40.00 call and selling the Feb '13 $50.00 call for a total debit of $8.66. The trade has a lifespan of 51 days and would provide 0.82% downside protection and an assigned return rate of 15.47% for an annualized return rate of 111% (for comparison purposes only). Eli Lilly (LLY) has a current annual dividend yield of 3.96%.
(C) Copyright 2012, Marketintelligencecenter.com. All rights reserved.
As of Sunday, 12-23-2012 23:59, the latest Comtex SmarTrendA? Alert,
an automated pattern recognition system, indicated an UPTREND on
04-02-2012 for LLY @ $40.44.
For more information on SmarTrend, contact your market data
provider or go to www.mysmartrend.com
SmarTrend is a registered trademark of Comtex News Network, Inc.
Copyright A? 2004-2012 Comtex News Network, Inc. All rights reserved.
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