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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: Mark Mandel who wrote (9113)11/20/1998 6:01:00 PM
From: Herm  Read Replies (2) of 14162
 
ORCL looks good. ORCL has a growth rate of 24.95% and a P/E of 28 vs
a 38.8 for the industry group. Now, the choice is to cover your CC at a
loss and roll upwards vs. holding tight! I looked at the chart and
notice the breakout in the $30 old overhead resistance level. The next
resistance will come around $34 to $36 since that price range had
many buyers waiting for months. Thus, it will be the first opportunity
for them to dump ORCL and break even. So, I would expect ORCL to
hit a brick wall at that next resistance level.

NASDAQ: (ORCL : $33 15/16) $32,984 million Market Cap at November
20, 1998 Ranks 296th in the Fortune 500 on Revenue & 139th on
Profit. Employs 30,000. Trades at a 28% Discount PE Multiple of 28.0
X, vs. the 38.8 X average multiple at which the Software & Services
SubIndustry is priced.

askresearch.com

If you cover at a loss your CCs and roll into another CC, I would write a
LEAP at the money out as far as I could with a high open interest.
ORCL is going to pull back and you can cover later and keep a major
portion of the premies.

If you stay and don't cover, then buy sideshow long calls at the strike
price your CCs are and ride it up some. That will give you more profit.

As you know, I hate to cover at a loss. I have been burned more doing
that!
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