Dow Chemical ( NYSE: DOW ) ended the last trading session at $40.92. So far the stock has hit a 52-week low of $38.89 and 52-week high of $47.96. Dow Chemical stock has been showing support around 40.37 and resistance in the 41.29 range. Technical indicators for the stock are Bearish and S&P gives DOW a neutral 3 STAR (out of 5) hold rating. For a hedged play on this stock, look at a Feb '08 40 covered call (DOW BH) for a net debit in the $38.82 area. That is also the break even stock price for this trade. This covered call has a 51 day duration, provides 5.13% downside protection and a 3.04% assigned return rate for a 21.75% annualized return rate (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 DOW Jan '09 25 Call (VDO AE) and selling the Feb '08 40 call (DOW BH) for a $13.90 debit. The trade has a 51 day life and would provide 4.94% downside protection and a 7.91% assigned return rate for a 57.00% annualized return rate (for comparison purposes only). Dow Chemical has a current annual dividend yield of 4.10%. [IHF - Investors Observer]