Aluminum Corporation of China (ACH) Trading Near $22.85 Support Level

Aluminum Corp of China (NYSE: ACH) closed Tuesday's trading session at $23.18. In the past year, the stock has hit a 52-week low of $18.03 and 52-week high of $28.88. Aluminum Corporation of China stock has been showing support around $22.85 and resistance in the $23.67 range. Technical indicators for the stock are Bearish. For a hedged play on this stock, look at the Aug '11 $23.00 covered call for a net debit in the $21.23 area. That is also the break-even stock price for this trade. This covered call has a duration of 150 days, provides 8.41% downside protection and an assigned return rate of 8.34% for an annualized return rate of 20.29% (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 ACH Jan '12 $10.00 call and selling the Aug '11 $23.00 call for a total debit of $12.60. The trade has a lifespan of 150 days and would provide 2.50% downside protection and an assigned return rate of 3.17% for an annualized return rate of 8% (for comparison purposes only). Aluminum Corporation of China does not pay dividends at this time.

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