Reliance Steel and Aluminum (RS) Could Break Through $48.77 Resistance Level

Reliance Steel and Aluminum (NYSE:RS) closed Monday's calm trading session at $46.75. In the past year, the stock has hit a 52-week low of $34.58 and 52-week high of $60.60. Reliance Steel and Aluminum stock has been showing support around $45.25 and resistance in the $48.77 range. Technical indicators for the stock are Bearish and S&P gives (RS) a very positive 5 STARS (out of 5) strong buy rating. For a hedged play on this stock, look at the Sep '11 $45.00 covered call for a net debit in the $42.55 area. That is also the break-even stock price for this trade. This covered call has a duration of 95 days, provides 8.98% downside protection and an assigned return rate of 5.76% for an annualized return rate of 22.12% (for comparison purposes only). Reliance Steel and Aluminum has a current annual dividend yield of 1.02%