Century Aluminum Could Fall Through $15.04 Support Level

Century Aluminum （NASDAQ:CENX） closed Tuesday's positive trading session at $15.68. In the past year, the stock has hit a 52-week low of $8.25 and 52-week high of $17.14. Century Aluminum stock has been showing support around $15.04 and resistance in the $16.00 range. Technical indicators for the stock are Bullish.

For a hedged play on this stock, look at the Jun '11 $14.00 covered call for a net debit in the $13.08 area. That is also the break-even stock price for this trade. This covered call has a duration of 129 days, provides 16.58% downside protection and an assigned return rate of 7.03% for an annualized return rate of 19.90% （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 CENX Jan '12 $7.50 call and selling the Jun '11 $14.00 call for a total debit of $5.85. The trade has a lifespan of 129 days and would provide 14.86% downside protection and an assigned return rate of 11.11% for an annualized return rate of 31%。