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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: mc who wrote (5593)10/23/1997 8:11:00 AM
From: Herm  Read Replies (3) of 14162
 
Welcome Gary,

I set the Bollinger Bands to both the 10 and 20 moving average with 1.5 deviation set for one year worth of prices. The 10 will give you more current direction. But, I look for the best pattern that touched the upper and lower bands for clues.

The RSI I set to 10 and 20 days also and plot the chart above the BB chart in order to line up the tops and bottoms pivot points. It is fairly accurate within one or two days of the actual events.

Right now, VVUS is testing the bottom. Yesterday, the price wondered as low as the $27+. HEAVY Blocks of trades lifted the stock off the $27 range. So, I would imagine that the shorts are covering and that the bottom floor may be $25 - $27 before a bounce back. It may be a brief event coming this week. On the other hand, we may see a trader's bounce today! 5 million shares were traded yesterday! That is massive. Those PUTs are mightly expensive right now and the profit potential RIGHT NOW are massive! I can't imagine some kind of reversal today even a small one.

I covered 5 of my 10 VVUS CCs yesterday and will cover the other 5 today. I will sell another round of Nov. 35 CCs again after a price recovery.
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