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Technology Stocks : America On-Line: will it survive ...?
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To: Xpiderman who wrote (2132)3/4/1997 9:07:00 PM
From: William H Huebl   of 13594
 
Hi Xy,

Actually, it's not my rule... it's Bernie Schaeffer's... just wish he would follow it all the time. THE RULE: don't buy CALL OPTIONS on a stock or index in which the 200 day moving average is down (that is AOL). And the opposite is true for PUTS. I believe the rule comes from looking at how stocks and indices tend to move within narrow bounds... when they are in uptrends... they move up, they move sideways but they don't move down much. And the opposite is true of downtrends. In options, you only have one out of 3 chances of being right to make money... the stock must trend strongly enough to make money in time-critical options. Sideways and counter moves just won't hack it!

For people buying stocks rather than options... knock yourself out! It doesn't matter because time doesn't cost you anything but old age.

I know I don't always explain things clearly, but I hope you get the gist of what I am trying to say.

Regards,

Bill
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