Teva Pharmaceutical (TEVA) Trading Near $54.70 Resistance Level

Teva Pharmaceutical Industries Ltd (NASDAQ: TEVA) closed Thursday's trading session at $52.69. In the past year, the stock has hit a 52-week low of $46.99 and 52-week high of $64.95. Teva Pharmaceutical stock has been showing support around $49.24 and resistance in the $54.70 range. Technical indicators for the stock are Bullish and S&P gives TEVA a positive 4 STARS (out of 5) buy rating. For a hedged play on this stock, look at the Feb '11 $55.00 covered call for a net debit in the $51.77 area. That is also the break-even stock price for this trade. This covered call has a duration of 54 days, provides 1.75% downside protection and an assigned return rate of 6.24% for an annualized return rate of 42.17% (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 TEVA Jan '12 $40.00 call and selling the Feb '11 $55.00 call for a total debit of $12.83. The trade has a lifespan of 54 days and would provide -0.27% downside protection and an assigned return rate of 16.91% for an annualized return rate of 114% (for comparison purposes only). Teva Pharmaceutical has a current annual dividend yield of 1.36%