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Edwards Lifesciences (EW) Could Break Through $78.25 Resistance Level Posted: Friday, September 16, 2011 8:08 AM EDT
Edwards Lifesciences Corp (NYSE: EW) closed Thursday's trading session at $76.32. In the past year, the stock has hit a 52-week low of $53.10 and 52-week high of $91.82. Edwards Lifesciences (EW) stock has been showing support around $73.43 and resistance in the $78.25 range. Technical indicators for the stock are Bullish and S&P gives Edwards Lifesciences (EW) a positive 4 STARS (out of 5) buy rating. For a hedged play on Edwards Lifesciences (EW), look at the Nov '11 $75.00 covered call for a net debit in the $70.62 area. That is also the break-even stock price for this trade. This covered call has a duration of 64 days, provides 7.47% downside protection and an assigned return rate of 6.20% for an annualized return rate of 35.37% (for comparison purposes only). A lower-cost hedged play for Edwards Lifesciences (EW) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the Edwards Lifesciences (EW) Jan '13 $45.00 call and selling the Nov '11 $75.00 call for a total debit of $28.30. The trade has a lifespan of 64 days and would provide 3.96% downside protection and an assigned return rate of 6.01% for an annualized return rate of 34% (for comparison purposes only). Edwards Lifesciences (EW) has a current trailing average dividend yield of 0%. [ABR-Seven Summits Research]
Edwards Lifesciences Corp (NYSE: EW) closed Thursday's trading session at $76.32. In the past year, the stock has hit a 52-week low of $53.10 and 52-week high of $91.82. Edwards Lifesciences (EW) stock has been showing support around $73.43 and resistance in the $78.25 range. Technical indicators for the stock are Bullish and S&P gives Edwards Lifesciences (EW) a positive 4 STARS (out of 5) buy rating. For a hedged play on Edwards Lifesciences (EW), look at the Nov '11 $75.00 covered call for a net debit in the $70.62 area. That is also the break-even stock price for this trade. This covered call has a duration of 64 days, provides 7.47% downside protection and an assigned return rate of 6.20% for an annualized return rate of 35.37% (for comparison purposes only). A lower-cost hedged play for Edwards Lifesciences (EW) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the Edwards Lifesciences (EW) Jan '13 $45.00 call and selling the Nov '11 $75.00 call for a total debit of $28.30. The trade has a lifespan of 64 days and would provide 3.96% downside protection and an assigned return rate of 6.01% for an annualized return rate of 34% (for comparison purposes only). Edwards Lifesciences (EW) has a current trailing average dividend yield of 0%. [ABR-Seven Summits Research]
