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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: Joseph Ziebarth who wrote (1004)3/15/1997 11:05:00 PM
From: Robert Graham   of 14162
 
INTC has broken down past its 50 day MA under fair volume and did a characteristic correction back to the 50 MA before resuming its downtrend toward its 200 day MA.

HWP has been on a short term downtrend, but the downtrend may be halted by its 50 day MA. ATML has been in an extended downtrend which went past its 50 day MA and 200 day MA, and it appears to be already at a significant resistance point. There is a fair chance that it may not go down any further.

However, in order to write CCs, it appears that you need some upside margin. So I think you would want a stock you know is going to move up before it moves down. ATML is in the best position to go up since it can bounce off of its 200 day MA. HWP can bounce off of its 50 day MA, but I would lay better odds on ATML. However, HWP will respond the best to positive news since both its 50 day MA and its 200 day MA are upward sloping compared to the other stocks that you mentioned. INTC is continuing its downtrend that it has already begun.

But I would still lay the better money on ATML. ATML is due for an uptrend very soon now irrespective of good or bad news. ATML is currently at around 24.5 and the next significant resistance point appears to be at 32.5. This is based on a one year price history. I will check its 2 year price history when I get a chance.

What are your event timelines for these stocks? Remember that a stock in its downtrend will not react as well to good news as if it was on an uptrend. By the way, what caused this ATML to drop like a rock?? Earnings disappointment with a promise form the company for continued earnings disappointments?
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