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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Herm who wrote (11495)	9/3/1999 1:05:00 PM
From: Herm	Read Replies (1) \| Respond to of 14162

ROST I was asked to comment on our old friend and the first stock we discussed on this forum many post ago. ROST This stock is once again about to split 2-1 on Sept. 22, and the record date is Sept. 7, 1999. So, you must own ROST by the end of Sept. 7, 1999. At the same time, ROST will pay an additional .06 1/2 cents/share as a dividend for holders as of Sept. 7 and payable on October 4, 1999. Well, we have the same situation as our first encounter with ROST. ROST was very profitable for all of us if you remember. TECHNICALS The weekly profile indicates ROST was hit with some profit taking once it reached the recent 52-week high. Now, ROST has reached the first bottom price support level around the $40 level and today the stock is up with the rest of the market and the trading volume should surpass the avg. of 308,935 by 100,000. Not what you may call a bottom yet. ROST may very well move sideways from here. The upper and lower BBs are forming a divergence and that should level off soon. Stocastics is just about ready to go positive. So, that is an early clue. OBV is at a gradual downward slope and about to go neutral. Another good clue of continued upward prices. After the split, a $20 to $22 stock price will attract more people. iqc.com FUNDAMENTALS I'm amazed how good a value ROST remains despite a 15%+ growth rate and with quarter after quarter of surprise ongoing positive earnings for this year at $3.32, it does not make sense why ROST could not be priced at 20 P/E x $3.32= $66.40 not including the dividends. This is a safe no brainer medium risk CC workhorse and long term hold in my opinion. A P/E of 12.4! Folks, this is steal in the stock market today. CHEAP! NASDAQ: (ROST : $41 1/2) $1,977 million Market Cap at September 3, 1999 Ranks 547th in the Fortune 1,000 on Revenue & 527th on Profit. Employs 20,100. Trades at a 45% Discount PE Multiple of 12.4 X, vs. the 22.4 X average multiple at which the Discount & Variety Stores SubIndustry is priced. Walk into any ROST store and you will always see the middle working class people spending their money in masses. They don't go to SAKs or Bloomies. Hey, that's fine with me! WINs Approach for ROST The RSI for ROST is just about as low as you can get for ROST. Meaning? ROST is in an oversold condition right now! So, you are pretty much at the bottom price level before the split. Buy into ROST two ways. 1. If you have the cash, buy into ROST by Sept. 7, and hold until right before the dividend payout date of Oct. 4, 1999. You should notice a drop in the stock price around that date. You may want to CC right before that OCT. 4, 1990 event. You will determine the strike price and month at that point. 2. Buy the ROST OCT. 40s @ 3 1/4 and either exercise and follow the above steps or cash out long CALLS sideshows for a profit. That's about it!

To: Herm who wrote (11495)	9/3/1999 6:34:00 PM
From: jaytee	Read Replies (1) \| Respond to of 14162

Herm: THANKS for further input on PWAV. And I am really enjoying going over recent posts, your comments, and putting your charts you allude to along side (of posts) to help make the concepts sink in. Also going to the coveredcalls site you suggested and printing out your contributions. Quite a few "nuggets" there. Anxious for your CD. NOW, for my usual "pain in the neck" (dumb)questions. THANX, jaytee: 1)Does WEEKLY BB charts you refer to take precedence over DAILY? often you refer to BOTH, I know. . . but is greater emphasis put on WEEKLY(due to greater # of closing bells?) Or, is weekly important, but, perhaps, it gets tempered by dailys (because they're the latest news . .and thus , might indicate a CHANGE in direction/attitude?) 2)Is there an ideal crossover point for RSI? (not too high/too late) I know what O'neal says, but I am more interested in what HERM says. 3)Could use some more light shed on OBV...what to look for/what it tells me (as an indicator). . . any ideal ranges or crossover points like stochastics? Is it tertiary after BB and RSI? 4)Are you doing more LEAPS these days (versus the "old days" when Steve ("ASK Steve thread) used to contribute) . . . how much of one's total CC "pie"(funds) should they make up? Safer due to extra long time frame? Would you say they're more appropriate for solid, but volatile stocks that one might be afraid to touch other wise (CMGI) ?