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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: jackmore who wrote (2029)	11/16/1999 2:40:00 AM
From: John K_k	Read Replies (3) \| Respond to of 24042

JDSU Prediction for next five trading days. If you go to www.cboe.com and look at JDSU Nov options, you will notice large numbers of contracts (approximately equal numbers of puts and calls) at the 190 and 195 strike prices. In my experience with options, the market makers like to have the stock finish so as to make as many options as possible expire worthless. This coming Friday options expire. The large number of 190 and 195 strike price options contracts leads me to believe that JDSU will finish Friday at either $190 US or $195 US. If JDSU finishes higher many investors 'win' with their call options. If it finishes lower many investors 'win' with their put options. The logical options expiry day finish is at 190 or 195. The market maker is currently feeling out the market. Letting the stock run up and hoping to sell more calls at premium. At the same time these little forward runs encourage others to lock in profit buying puts (at a premium mind you) The little fall backs help the market maker collect shares for the next major advance, and to test the strength of the stock. The strong moves from the Thursday and Friday lows last week, indicate that there is lots of upside left. After the close at 190 or 195 on Friday, the trend line as exhibited be the 20 day moving average will be close to 190. This sets us up for a couple of false starts both up and down early next week. The market maker collects more shares, and sell more protective puts. By Wednesday or Thursday next week, the next move forward may be ready to happen. If the market is strong, it may happen at the opening this coming Monday. If the market is week, it may take us to the following Monday before we advance. A forward advance after a little shakeout, and round of put buying is just the recipe for strong forward movement. The shorts relish the 10 point drops, and climb on board. It is then that a new short term low encourages masses of buyers. The shorts have to cover, the puts expire worthless, and the move has been too rapid to allow for much short term call options buying. The trends lasts 3-4 days. Longs gain confidence and buy more short term calls, and also buy protective puts. The cycle repeats. We'll soon see what happens. I find it instructive to design scenarios to use for investing purposes. With practice you can get very good at this. While I'm generally a long term investor. This strategy helps me move into and out of some stocks at opportune times. I don't generally sell "any JDSU or JDU", but will sell other core long term holdings to buy JDSU options when I anticipate a move forward. After the move, I buy back my other long term holdings, and use any profit to buy more JDSU. It works for me!