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Aluminum Corporation of China (ACH) PriceWatch Alert Targets 22.18% Downside Protection
- China Aluminium Network
- Post Time: 2009/7/31
- Click Amount: 530
Aluminum Corporation of China (NYSE: ACH) closed yesterday at $27.05. So far the stock has hit a 52-week low of $7.22 and 52-week high of $30.00. Aluminum Corporation of China stock has been showing support around 26.29 and resistance in the 28.23 range. Technical indicators for the stock are Bullish and S&P gives ACH a neutral 3 STAR (out of 5) hold rating. ACH appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Nov '09 22.50 covered call (ACH KX) for a net debit in the $21.05 area. That is also the break even stock price for this trade. This covered call has an 114 day duration, provides 22.18% downside protection and a 6.89% assigned return rate for a 22.05% 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 '11 5 Call (ZFY AA) and selling the Nov '09 22.50 call (ACH KX) for a $16.50 debit. The trade has an 114 day life and would provide 20.52% downside protection and a 6.06% assigned return rate for a 19.00% annualized return rate (for comparison purposes only). Aluminum Corporation of China has a current annual dividend yield of 0.51%.
Source: Market Intelligence Center
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