Autodesk (ADSK) Up Over 1% Yesterday And In Tight Support/Resistance Range

Autodesk (NasdaqNM: ADSK) closed yesterday at $25.23. So far the stock has hit a 52-week low of $11.70 and 52-week high of $27.26. Autodesk stock has been showing support around 24.38 and resistance in the 25.96 range. Technical indicators for the stock are Bullish and S&P gives ADSK a neutral 3 STAR (out of 5) hold rating. ADSK appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Apr '10 24 covered call (ADQ DX) for a net debit in the $21.93 area. That is also the break even stock price for this trade. This covered call has a 165 day duration, provides 13.08% downside protection and a 9.44% assigned return rate for a 20.88% 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 ADSK Jan '11 7.50 Call (ZPD AU) and selling the Apr '10 24 call (ADQ DX) for a $14.75 debit. The trade has a 165 day life and would provide 11.81% downside protection and an 11.86% assigned return rate for a 26.00% annualized return rate (for comparison purposes only). Autodesk does not pay dividends at this time.

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