WOW Kmartin!
You rode down SDTI from the high with an in the money CC! You made a
killing on that one! Very nice hedge for the pull back!
QUESTION: "With this chart showing some support around
16.50 should I cover and and try writing something new (based on the
gap up statement) or should I continue to wait for the tag. Which, if
either is the stronger case. Also, is the series of higher lows in
the RSI significant."
askresearch.com
ANSWER:I looked up the float turnover (TRO) off Doug's web
site. SDTI TRO is super fast with a turnover Rate: 14.69 Days. That
is one quick turning stock and the price moves would be explosive!
In December, SDTI has the lowest short interest in 12 month period
just as the price started upward. It figures, less short interest,
higher prices. More short interest, lower prices. Below are the
current figures for SDTI short interest which is average.
02/99 2,460,514 1,447,967 1.70 days to cover short!
01/99 2,857,483 1,698,841 1.68
12/98 1,836,175 2,046,051 0.90
11/98 1,614,221 1,015,147 1.59
10/98 1,846,300 802,852 2.30
09/98 2,272,535 274,741 8.27
The chart above for 18 months time span show the peak and lows. There
is plenty of price support in the $14-$15 area. To break that line
would mean a new bottom! You could always cover and write another CC
in the money to counter that! In the meantime, you are sitting on a
CC and time is on your side! Your downside is protected! HOLD your
position until SDTI reveals the next move. There is bound to be a
bounce off $15 with heavy volume provided there is no new bad news!
If SDTI gaps up upon tagging that lower BB, then you can choose to
cover the CCs and/or go long with sideshow SDTI CALLs. The long CALLs
would capture that price action and still maintain control of your
portfolio value.
NASDAQ: (SDTI : $16 5/8) $581 million Market Cap at March 11, 1999
Trades at a 45% Discount PE Multiple of 24.4 X, vs. the 44.4 X
average multiple at which the Software & Services SubIndustry is. |
