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Strategies & Market Trends : Tech Stock Options

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To: Michael Hillman who wrote (1976)	5/23/1996 4:48:00 PM
From: Pascal A. Mons	of 58727

Michael... On IOMG I have I slightly different approach on the readings, though may be in the end it's the same! $55 was set as a resistence level by Computer Trading no doubt about that. I believe that the next move after a Computer Trading show is always on the reverse direction on the onset of the the following session. This time it's trader initiated. They try to make profit by testing the new support for IOMG (conversely the new resistence if computer trading was a downward move). They know that it's found at resistence less $5 or less $10... Today it's interesting because the price seemed to stabilize at $50, but for only 15 mn went below down to $48. I would then say that it's support is uncertain but most likely to be $50 (though weak by a trader standard). Then a mid-curse set back was expected and occured ~$52 1/2. However since 1:00 pm the overall trend was down meaning more and more traders were trying to attack the $50 support. During the final hour of trading the price went in the $1 buffer (below $51) though it never touched $50 (meaning there is some defense here). Unfortunately I didn't get the volume chart... The maximum dip is expected to be $9 ($10 less one dollar), a usual dip is $5... That may explain the price of the puts. However beware of holding puts for a long time on a high quality stock... For tomorrow I would suggest to watch closely what happen to the $50 support level. If it's crushed (a safe reading would be price < $49). Then jump on Puts... for a $5 ride... and a bumpy mid-curse set. I don't understand well your 'buy the cheap puts' ? What if the stock hang mid-curse $52 1/2 ?

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