AMERICAN EXPRESS (AXP) PRICEWATCH ALERT UP TO 21.39% RETURN

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American Express (AXP) PriceWatch Alert Up To 21.39% Return
Posted on Friday, March 13, 2009 8:07 AM
American Express (NYSE: AXP) closed yesterday at $13.15. So far the stock has hit a 52-week low of $9.71 and 52-week high of $52.63. American Express stock has been showing support around 10.25 and resistance in the 14.83 range. Technical indicators for the stock are Bearish and S&P gives AXP a weak 2 STAR (out of 5) sell rating. AXP appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Jan '10 7.50 covered call (WXP AU) for a net debit in the $6.35 area. That is also the break even stock price for this trade. This covered call has a 309 day duration, provides 51.71% downside protection and an 18.11% assigned return rate for a 21.39% 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 AXP Jan '10 5 Call (WXP AA) and selling the Jan '10 7.50 call (WXP AU) for a $2.10 debit. The trade has a 309 day life and would provide 46.01% downside protection and a 19.05% assigned return rate for a 22.00% annualized return rate (for comparison purposes only). American Express has a current annual dividend yield of 5.92%.

NOTE:this stock of the a longer term of call option in the place of the covered call stock purchase.

[For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]
Click Symbol For More News On: (AXP)
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