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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: Dan Duchardt who wrote (11840)	11/17/1999 8:19:00 AM
From: Casaubon	Respond to of 14162

The price objective of the pattern is measured as a function of the height of the entire pattern. So, roughly, the depth of the neckline to the most extreme low price was approximately $10 down to $4, or six dollars. To calculate the extent of an expected move to the upside, one then adds that amount to the breakout price. I have the neckline extending up to $13, so, ultimately the price objective will add the six dollars to that, bringing the final objective to $19. However, it is hard to put a timeframe on that analysis. So, instead of worrying about that, I try to use the price action to determine good action points. What do I mean by this? Well, the candlestick yesterday was a nice healthy up move, but it occurred on massive volume. I suspect what will occur is that the trend will continue up for the rest of the week, but the price will make incrementally smaller moves on lower volume (which I suspect will top out near $13). So, to determine the appropriate action it is necessary to follow the price and volume action. Another possibility is that the stock will just put in a stalled pattern by putting in a spinning top candlestick at the top of yesterdays range. Both of these patterns are the time to write calls or take profits.