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

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To: hpeace who wrote (1061)	3/15/1997 12:40:00 PM
From: Robert Graham	of 14162

The reason I am speakinh up now is that I see possabilities with short term covered call writing, particularily when backed up by TA, which is an area that at least I am familliar with. :) Bollinger Band analysis indicates the stock has predictably backed off from its very steep incline but is still moving up. It does have room now before the upper band is reached. The upper band is at 29. Also, the upper Bollinger Band is now at the level of the upper trend line. Also, a sign of a top would be the shrinking of the width of the bands which has not happened yet. Candlesticks, which is a tool for the analysis of day to day price fluctuations, indicates that even though there is still life to the upward trend, it apparently is showing some signs of nearing its top. I suspect there daily trading range will shorten before this happens since there has been alot of long bars recently. Then I would expect something like the stock opening and closing at its extreme where the open and close will be close together. There also is a temporary resistance point established at 27 due to the comparatively large price increase that occured on 3/12/97. This has been a very strong uptrend for the stock. A good earning report can extend this uptrend but I believe only temporarily before a correction occurs. I will have to see what happens after the earnings report is released. What is interesting is that there recently has not been that characteristic growth in volume near the top of its uptrend. In the past, this volume pattern was there, but starting with the top formed iin December it has not been as pronounced and this time it there may be little evidence of it happening. Evidently there has been a change in the investor profile of the stock as the stock continued its uptrend. I wonder how the stock split will change this?

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