GM (GM) Showing Resistance Near $35.53

For a hedged play on GM (GM)’s patented trade-picking algorithms selected a Feb 15, 2019 $33 covered call for a net debit in the $32.02 area. That is also the break-even stock price for the covered call. This trade will return 3.02%, or 31.58% annualized (for comparison purposes only), in 35 days. This covered call also provides 7.77% downside protection.

A lower-cost play on GM would use a longer term call option in place of the long position in the stock. Look at the Jan 17, 2020 $23 call and the same sold call for a net debit of $9.55.This trade only has 6.27% downside protection, but the assigned return rate rises to 4.71% or an annualized rate of 49.13% (for comparison purposes only).

The current 52-week low is $30.56 and the 52-week high is $45.52. GM stock has been showing support around $33.76 and resistance in the $35.53 range. The stock closed Jan 10, 2019's trading session at $34.72. 

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