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 Focus Media (FMCN) Showing Bullish Technicals With Support At $29.48
 
CreateTime:2011-08-30     Source:marketintelligencecenter Editor:lile
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Focus Media (NASDAQ:FMCN) closed Friday's dramatic trading session at $31.32. In the past year, the stock has hit a 52-week low of $18.46 and 52-week high of $37.58. Focus Media (FMCN) stock has been showing support around $29.48 and resistance in the $32.48 range. Technical indicators for the stock are Bullish. For a hedged play on Focus Media (FMCN), look at the Jan '12 $29.00 covered call for a net debit in the $26.02 area. That is also the break-even stock price for this trade. This covered call has a duration of 145 days, provides 16.92% downside protection and an assigned return rate of 11.45% for an annualized return rate of 28.83% (for comparison purposes only). A lower-cost hedged play for Focus Media (FMCN) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the Focus Media (FMCN) Jan '13 $7.50 call and selling the Jan '12 $29.00 call for a total debit of $19.35. The trade has a lifespan of 145 days and would provide 14.27% downside protection and an assigned return rate of 11.11% for an annualized return rate of 28% (for comparison purposes only). Focus Media (FMCN) has a current trailing average dividend yield of 0%. [THA-Seven Summits Research]

 


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