Aluminum Corporation of China (ACH) NewsBite

Aluminum Corporation of China (NYSE: ACH) closed yesterday at $42.09. So far the stock has hit a 52-week low of $31.51 and 52-week high of $90.95. Aluminum Corporation of China stock has been showing support around 40.46 and resistance in the 43.70 range. Technical indicators for the stock are Neutral and S&P gives ACH a neutral 3 STAR (out of 5) hold rating. For a hedged play on this stock, look at a Jul '08 40 covered call (ACH GH) for a net debit in the $37.79 area. That is also the break even stock price for this trade. This covered call has a 52 day duration, provides 10.22% downside protection and a 5.85% assigned return rate for a 41.05% 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 ACH Jan '09 22.50 Call (XPQ AX) and selling the Jul '08 40 call (ACH GH) for a $15.80 debit. The trade has a 52 day life and would provide 9.00% downside protection and a 10.76% assigned return rate for a 76.00% annualized return rate (for comparison purposes only). Aluminum Corporation of China has a current annual dividend yield of 1.90%. [IHF - Investors Observer]