Cognizant Technologies Solutions Inc. (CTSH)

[sasi]

http://www.marketintelligencecenter.com/analyfav/1240002

Cognizant Technology Solutions Corp (NASDAQ: CTSH) closed Wednesday's trading session at $72.82. In the past year, the stock has hit a 52-week low of $42.08 and 52-week high of $73.30. Cognizant Technology stock has been showing support around $72.39 and resistance in the $73.39 range. Technical indicators for the stock are Bullish and S&P gives CTSH a positive 4 STARS (out of 5) buy rating. For a hedged play on this stock, look at the Feb '11 $70.00 covered call for a net debit in the $67.92 area. That is also the break-even stock price for this trade. This covered call has a duration of 58 days, provides 6.73% downside protection and an assigned return rate of 3.06% for an annualized return rate of 19.27% (for comparison purposes only). A lower-cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the CTSH Jan '12 $30.00 call and selling the Feb '11 $70.00 call for a total debit of $38.70. The trade has a lifespan of 58 days and would provide 5.66% downside protection and an assigned return rate of 3.36% for an annualized return rate of 21% (for comparison purposes only). Cognizant Technology does not pay dividends at this time