Nalco (NLC) Showing Bullish Technicals But Could Break Through $29.47 Resistance

Nalco Holding Co (NYSE: NLC) closed Tuesday's trading session at $28.95. In the past year, the stock has hit a 52-week low of $20.15 and 52-week high of $32.62. Nalco stock has been showing support around $28.29 and resistance in the $29.47 range. Technical indicators for the stock are Bullish and S&P gives NLC a neutral 3 STARS (out of 5) hold rating. For a hedged play on this stock, look at the Sep '11 $28.00 covered call for a net debit in the $26.90 area. That is also the break-even stock price for this trade. This covered call has a duration of 136 days, provides 7.08% downside protection and an assigned return rate of 4.09% for an annualized return rate of 10.97% (for comparison purposes only). Nalco has a current annual dividend yield of 0.48%.