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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: Dan Duchardt who wrote (12278)2/8/2000 8:07:00 AM
From: Herm  Read Replies (1) of 14162
 
IFMX Here we go again! Yesterday, IFMX finally broke
upward past the $15.00 barrier to close into a new range of
$16 plus. That price level has not been seen for quite some
time. My current CCs was at the breakeven and decision time
to either cover at a breakeven, wait for a slight price
increase, and roll into a new round of CCs before the stock
peters out.

Here are the current factors and the daily chart profile
that leads me to believe IFMX may have a tough time climbing
up from here.

siliconinvestor.com

1. IBM just announced a law suit against IFMX for patient
infringement. Well, that is for a court of law to decide.
But, it does not may it any easier to have a massive gorilla
like IBM on your case. IBM sure does have deep pockets.
biz.yahoo.com

2. IFMX news was hitting the streets and boosting the IFMX
price lately. The chart was showing signs of a pull back
and potential sideways period. Factors? High RSI, a tag of
the upper BB and elongating upper BB with the center moving
average in the center moving upward. But, that was before
this lawsuit announcement. Those poor folks waiting at the
$15 since April 1997 will most likely dump at the first
chance.

SUMMARY? Hummm? I like IFMX and my nut is way down in
the $6.00 range. I'm tempted to cover my CCs for the May 15s
and cash out or perhaps short against the box and wait it
out. After all, they has to be a downward bias until this
law suit is settled. Lawyers and countersuits all cost money
and impact the bottom line. IFMX does not need another
period of struggle at this point.

You folks that are not IFMX may be able to take advantage of
the news and the knowledge of the downward pressure on IFMX.
It does not matter which way IFMX or any stock is moving.
You can make money using the right WINs sideshow tool.

Traing Approach? The MMs might force IFMX to open
slighly higher and then gap downward today. If they have
markte sell order waiting the MMs will boost the IFMX price
on an uptick to gather enough stock to short. That will give
them enough IFMX shares to meet those sell orders. Next,
they let the IFMX trap floor drop to lower the IFMX price
to trip those stop loss sell order and in order for the MMs
to cover their short positions at a profit. What a sweet
deal for them. Like clock work!

I might take advantage of that fear and flight out of IFMX
to cover my CCs at the bottom. The MMs will rebound IFMX to
trigger the buy orders for bargain hunters. I might short
IFMX at that point. My intent is to freeze my profit in IFMX
until the dust settles. If IFMX goes down, I'm protected. If
IFMX goes up, I'm protected. The clock freezes either way.
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