re: if you do this 6 times a year Jacob, ....
I haven't done it even once successfully, and I very much doubt I do it 6 times a year.
I usually don't sell covered calls, I'm greedy for all the upside if I'm long, and if I don't think it's going up, I sell it or even buy puts. Maybe I'm just getting older and more cautious.
But, the TA and the FA both line up now:
TA says 40 was a strong support level for a long time, and now is a strong resistance level.
FA: In the 40s, AMAT is pricing in a sharp economic rebound in 2H02. I think it's pretty safe to say that semiequip bookings are now at (or very close) to the absolute bottom for this cycle. But, we have no idea how long we grind along at these low rates (where no one is profitable, except in the proforma fantasy). Capacity utilization, throughout the industrial sector, and in semis in particular, are at lows reached only a few times in the last century. And that's with consumer spending propped up in various ingenious but unsustainable ways. If consumer spending really collapses (and that means consumer demand for chips, too) then semiequip bookings could stay at current levels till late 2002. And that is not priced into AMAT in the 40s.
If it gets called away, then I effectively sold it at 43.7. And if the stock keeps going up, I'd think seriously about buying put LEAPs in the high 40s. If I was wrong about 40 being resistance, then I'll bet that 50 is. And if I'm wrong about 50, then I'll........quit guessing. |
