Infosys Technologies (INFY) Could Threaten Support Levels Today

Infosys Technologies (NasdaqNM: INFY) closed yesterday at $47.19. So far the stock has hit a 52-week low of $21.10 and 52-week high of $50.10. Infosys Technologies stock has been showing support around 46.32 and resistance in the 48.84 range. Technical indicators for the stock are Bullish and S&P gives INFY a neutral 3 STAR (out of 5) hold rating. INFY appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Dec '09 47.50 covered call (IUN LW) for a net debit in the $44.99 area. That is also the break even stock price for this trade. This covered call has a 52 day duration, provides 4.66% downside protection and a 5.58% assigned return rate for a 39.16% 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 INFY Jan '11 17.50 Call (ZIZ AA) and selling the Dec '09 47.50 call (IUN LW) for a $29.15 debit. The trade has a 52 day life and would provide 1.14% downside protection and a 2.92% assigned return rate for a 20.00% annualized return rate (for comparison purposes only). Infosys Technologies has a current annual dividend yield of 1.45%.

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