Research in Motion (RIMM) With Support Around $64.96 And Bearish Technicals

Research in Motion (NasdaqNM: RIMM) closed yesterday at $65.75. So far the stock has hit a 52-week low of $35.05 and 52-week high of $88.08. Research in Motion stock has been showing support around 64.96 and resistance in the 67.34 range. Technical indicators for the stock are Bearish and S&P gives RIMM a neutral 3 STAR (out of 5) hold rating. RIMM appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Jan '10 70 covered call (RFY AN) for a net debit in the $62.15 area. That is also the break even stock price for this trade. This covered call has an 86 day duration, provides 5.48% downside protection and a 12.63% assigned return rate for a 53.61% 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 RIMM Jan '11 35 Call (OHR AG) and selling the Jan '10 70 call (RFY AN) for a $29.50 debit. The trade has an 86 day life and would provide 1.90% downside protection and an 18.64% assigned return rate for a 79.00% annualized return rate (for comparison purposes only). Research in Motion does not pay dividends at this time.

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