Walmart Stores (WMT) Trading Just Below Resistance With Bearish Technicals And Very Positive 5 STARs S&P Rating

Nov 02, 2009

Walmart Stores (WMT) Trading Just Below Resistance With Bearish Technicals And Very Positive 5 STARs S&P Rating

Nov 02, 2009 (Fresh Brewed Media via COMTEX News Network) -- Walmart Stores (NYSE: WMT) ended the last trading session at $49.68. So far the stock has hit a 52-week low of $46.25 and 52-week high of $59.23. Walmart Stores stock has been showing support around 49.09 and resistance in the 50.75 range. Technical indicators for the stock are Bearish and S&P gives WMT a very positive 5 STAR (out of 5) strong buy rating. WMT appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Mar '10 47.50 covered call (WMT CW) for a net debit in the $45.98 area. That is also the break even stock price for this trade. This covered call has a 138 day duration, provides 7.45% downside protection and a 3.31% assigned return rate for an 8.74% annualized return rate (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 WMT Jan '11 35 Call (VWT AG) and selling the Mar '10 47.50 call (WMT CW) for an $11.60 debit. The trade has a 138 day life and would provide 6.20% downside protection and a 7.76% assigned return rate for a 21.00% annualized return rate (for comparison purposes only). Walmart Stores has a current annual dividend yield of 2.18%.

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