Ford Motor Company (F)

[CHA$E]

Ford Motor (F) Showing Bearish Technicals...


... With Support At $14.96

Posted: Tuesday, May 17, 2011 8:47 AM EDT

Ford Motor (NYSE:F) closed Monday's frenetic trading session at $15.13. In the past year, the stock has hit a 52-week low of $9.75 and 52-week high of $18.97. Ford Motor stock has been showing support around $14.96 and resistance in the $15.40 range. Technical indicators for the stock are Bearish and S&P gives F a positive 4 STARS (out of 5) buy rating. For a hedged play on this stock, look at the Sep '11 $15.00 covered call for a net debit in the $14.00 area. That is also the break-even stock price for this trade. This covered call has a duration of 123 days, provides 7.47% downside protection and an assigned return rate of 7.14% for an annualized return rate of 21.20% (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 F Jan '12 $12.50 call and selling the Sep '11 $15.00 call for a total debit of $2.12. The trade has a lifespan of 123 days and would provide 3.37% downside protection and an assigned return rate of 17.92% for an annualized return rate of 53% (for comparison purposes only). Ford Motor does not pay dividends at this time. [ATU-Seven Summits Research]


http://www.marketintelligencecenter.com/analyfav/1273620