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Strategies & Market Trends : Stochastics
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To: Cathedra who wrote (862)9/29/1998 8:31:00 PM
From: Wayners  Read Replies (3) of 927
 
I think CMGI is going to consolidate for a week or two, but I'm not sure its going to be long enought to avoid being called out at $60. The trend is up on CMGI and its slightly above a support level established back in Apr/May timeframe. The trend on stochastics is up as well. If you write calls now, I think its a good time to do it--you just might have to buy them back as opposed to waiting for them to expire worthless. You might want to write the Oct 55s as opposed to the Oct 60s. You'll get more for them right now, probably $4 to $5. $9 is out of the question, even for $60 at the money. I think the trend on CMGI has a good liklihood to push CMGI believe it or not back up to $70 or higher. CMGI is currently in a consolidation pennant. These usually break in the direction of the trend--up in this case. If I were you, I think I'd watch it and see if it starts to break to the downside of the pennnant. When/if it does--write the Oct 55 calls at that time. In that way you maintain all of the upside potential on the stock.

The trend is up on stochastics as well on NSOL. The trend is up there also. The volatility is very high and peaked--so its getting hit with profit taking. Support on profit taking should be at about $37 to $37 1/2--Might see $35 and change intraday or something. If you are looking to buy NSOL, I'd aim lower than $39 and not only that I'd wait to see a low volume base at the $37 level first--then either buy in or put in a buy stop higher in anticipation of an upward break. Hope this all helps. What are you going to be flippin' next? I'm stuck long on CIEN at $15 and short NOVL at $11 1/2 for now and waiting.
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