Broadcom (BRCM) With Support Around $25.68 And S&P 4 Star Buy Rating

Broadcom (NasdaqNM: BRCM) closed yesterday at $26.41. So far the stock has hit a 52-week low of $13.15 and 52-week high of $31.20. Broadcom stock has been showing support around 25.68 and resistance in the 27.30 range. Technical indicators for the stock are Bearish and S&P gives BRCM a positive 4 STAR (out of 5) buy rating. BRCM appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Feb '10 25 covered call (RBF BE) for a net debit in the $23.21 area. That is also the break even stock price for this trade. This covered call has a 107 day duration, provides 12.12% downside protection and a 7.71% assigned return rate for a 26.31% 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 BRCM Jan '11 7.50 Call (VJG AU) and selling the Feb '10 25 call (RBF BE) for a $16.70 debit. The trade has a 107 day life and would provide 8.37% downside protection and a 4.79% assigned return rate for a 16.00% annualized return rate (for comparison purposes only). Broadcom does not pay dividends at this time.

THA-Seven Summits Research Goto www.iotogo.com/18w1 for our free report titled, The 18 Ways To Know When It's Time To Dump A Stock

Related terms: dividends, investment opinion, research, S&P, trade