73.50 x 74.00pm soo far..Interesting Tech. Calls.
Cognizant Technology (CTSH) Showing Bearish Technicals With Support At $71.83
23 minutes ago - FreshBrewedMedia via Comtex
FreshBrewedMediaCognizant Technology (NASDAQ:CTSH) closed Tuesday's seesaw trading session at $73.72. In the past year, the stock has hit a 52-week low of $45.85 and 52-week high of $83.48. Cognizant Technology stock has been showing support around $71.83 and resistance in the $74.85 range. Technical indicators for the stock are Bearish and S&P gives CTSH a positive 4 STARS (out of 5) buy rating. For a hedged play on this stock, look at the Jul '11 $70.00 covered call for a net debit in the $68.22 area. That is also the break-even stock price for this trade. This covered call has a duration of 59 days, provides 7.46% downside protection and an assigned return rate of 2.61% for an annualized return rate of 16.14% (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 $47.50 call and selling the Jul '11 $70.00 call for a total debit of $21.60. The trade has a lifespan of 59 days and would provide 6.27% downside protection and an assigned return rate of 4.17% for an annualized return rate of 26% (for comparison purposes only). Cognizant Technology does not pay dividends at this time.
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