Novell (NOVL) dirt cheap, good buy? Message Board

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Technology Stocks : Novell (NOVL) dirt cheap, good buy?

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To: Don Earl who wrote (22125)	5/26/1998 10:47:00 AM
From: Paul Fiondella	Read Replies (1) of 42771

A trading strategy for NOVL that seems to work In the past we have had the run up to earnings, a week before the date, pushing the price up followed by the sell-off. Was this time different? Yes. Biggest change has been the brokers buying into the stock, in anticipation of or dreaming about a "turnaround". Since we know market psychology is more important than fundamentals, Novell got good hype. Even now after the numbers it is a "hold". So the sell-off waited until the earnings this time (usually it doesn't)to see if there was an upside surprise. A trading strategy that seemed to work for this situation. Buy out of the money Calls to protect against the upside surprise and sell the stock short at the best price as close to the runup to earnings date as possible. Any comments?

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