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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: Casaubon who wrote (9527)	1/27/1999 8:23:00 AM
From: Herm	Read Replies (1) of 14162

TDFX has a 23.33% growth rate and an undervalued P/E. There are plenty of strike prices in the options and open interest to play with. I'm a little curious why the recent insider dumping starting in November and December at $14.00 by quite a few CEOs. That leads me to believe that there are some tough times ahead before TDFX rebounds. NASDAQ: (TDFX : $15) $189 million Market Cap at January 26, 1999 Trades at a 65% Discount PE Multiple of 17.6 X, vs. the 50.0 X average multiple at which the Software & Services SubIndustry is priced. Overhead price resistance with kick in at $16.00. Without some big earnings or news item I doubt it would break through. iqc.com VRTX not expected to earn profits in 1999. The earning losses have been getting smaller and smaller. Note! Short Interest for VRTX is 8.6% of the shares outstanding, requiring 13 days to cover. If a positive news item does occur, it could potentially create a nice short squeeze upward price gap! Open interest is weak for the stock! It is hard to tell if the public's expectations are built into the VRTX price already. Such large short interest with such a rapid price climb over the last two months is setting this stock up for a show down. Any negative news will cause VRTX to come crashing down! I would not own VRTX without a load of cheap PUTs for downside protection! NASDAQ: (VRTX : $31) $778 million Market Cap at January 26, 1999 Loss Expected for 1999; Drugs SubIndustry priced at 37.1X PE iqc.com

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