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

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To: Robert Graham who wrote (1064)	3/15/1997 1:02:00 PM
From: Robert Graham	of 14162

So much for my interative editing. My 15 minute window closed before I was finished. Here is the final form of my current analysis of this stock. 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. The price pattern has been flattening out near the upper trend line, which it is very close to right now. Still, a sign of a top forming 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 a "resting" point where there will be at least a temporary pause in its uptrend. There has been ten bars in a row where the daily close has been higher than the close of five bars ago. This also would indicate at least a temporary correction would occur from its very strong uptrend. 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 definitely been a very strong uptrend for the stock. A good earning report can extend this uptrend but I believe only temporarily before a short term downtrend 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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