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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: Ron T who wrote (11831)11/16/1999 8:07:00 AM
From: Casaubon  Read Replies (2) of 14162
 
A decent way to tell the stock is making a top involves candlestick analysis. When the stock is making smaller and smaller up moves, after a quick move up, and it is doing this on diminishing volume, it's usually a good time to write calls.

If you are dealing with a fast moving stocking and happen to be watching the price action, you can sometimes catch the reversal action! Here is something to look for: When the price explodes on huge volume and then the stock starts trading a lot of volume at one price, watch for the price to start moving down. That's probably a good time to write calls ITM, buy puts, or just sell. If you use this, you'll probably want to place a market order.

Read Japanese Candlestick Charting Techniques, by Steve Nison

Good Luck!
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