Kraft Foods Inc. (NYSE: KFT) opened at $34.90. So far today the stock has hit a low of $34.54 and a high of $35.20. As of 10:50, KFT is trading at 34.89, down 0.64 (-1.8%).

After hitting a one year high of $37.20 in June, the stock has dropped down to test support around 35 over the past two weeks. The stock is slipping today after the company announced that it offered $7.2 billion in cash to acquire the biscuit division of French food company Groupe Danone SA (NYSE: DA). Recent technical indicators for KFT have been bullish but deteriorating slightly, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider an August bear-call credit spread above the $37.50 range. KFT has not been above $37.50 at all in the past year and has shown resistance around $36 recently. This trade could be risky if the company's earnings (due out in late July) are a positive surprise, but even if that happens, this relatively stable stock has had some serious resistance around $36 for much of the past year.

Brent Archer is an options analyst and writer at Investors Observer. Do you have any deadwood in your portfolio? Check out the 18 Warning Signs That Tell You When To Dump A Stock.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor control positions in KFT or DA.

Pepsico, Inc. (NYSE: PEP) opened at $65.38. So far today the stock has hit a low of $65.00 and a high of $66.00. As of 10:50, PEP is trading at $65.75, up $0.90 (1.4%).

After hitting a one-year high of $69.64 in May, the stock dipped below support at $66 in mid-June. Spinoff buzz in the sector is lifting many consumer goods stocks this morning as it looks as though Kraft Foods (NYSE: KFT) may purchase Group Danone's (NYSE: DA) LU Biscuit Unit. PepsiCo is also rumored to be interested in a purchase, perhaps in a separate Danone unit, though KFT is the clear front-runner for the biscuit unit at the moment. Recent technical indicators for PEP have been bearish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $62.50 range. PEP hasn't been below $62.50 for more than a few days at a time since November and has shown support around $64 recently. This trade could be risky if the company's earnings (due out on July 24) disappoint, but even if that happens, it looks like this stock could find support from its 200-day moving average, which it has been testing over the past week.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: At publication time, Brent neither owns nor controls positions in PEP, KFT, or DA.