Infosys Technologies (NASDAQ:INFY) closed Tuesday's downbeat trading session at $66.50. In the past year, the stock has hit a 52-week low of $53.28 and 52-week high of $77.92. Infosys Technologies stock has been showing support around $65.47 and resistance in the $67.23 range. Technical indicators for the stock are Bearish and S&P gives INFY a neutral 3 STARS (out of 5) hold rating. For a hedged play on this stock, look at the Jul '11 $67.50 covered call for a net debit in the $62.40 area. That is also the break-even stock price for this trade. This covered call has a duration of 122 days, provides 6.17% downside protection and an assigned return rate of 8.17% for an annualized return rate of 24.45% (for 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 '12 $45.00 call and selling the Jul '11 $67.50 call for a total debit of $19.25. The trade has a lifespan of 122 days and would provide 3.38% downside protection and an assigned return rate of 16.88% for an annualized return rate of 50.51% (for comparison purposes only). Infosys Technologies has a current annual dividend yield of 0.75%. [ABR-Seven Summits Research]
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