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Aluminum Corporation of China (ACH) Could Fall Through $20.43 Support Leve
Edited by : AL CIRCLE
2 min read
Aluminum Corporation of China (NYSE:ACH) closed Friday's downbeat trading session at $20.71. In the past year, the stock has hit a 52-week low of $18.18 and 52-week high of $26.80. Aluminum Corporation of China stock has been showing support around $20.43 and resistance in the $20.97 range. Technical indicators for the stock are Bearish. For a hedged play on this stock, look at the Nov '11 $20.00 covered call for a net debit in the $18.66 area. That is also the break-even stock price for this trade. This covered call has a duration of 166 days, provides 9.90% downside protection and an assigned return rate of 7.18% for an annualized return rate of 15.79% (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 $15.00 call and selling the Nov '11 $20.00 call for a total debit of $4.10. The trade has a lifespan of 166 days and would provide 7.77% downside protection and an assigned return rate of 21.95% for an annualized return rate of 48% (for comparison purposes only). Aluminum Corporation of China has a current annual dividend yield of 0.17%.
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