Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Herm who wrote (11931)	11/28/1999 8:23:00 PM
From: David Lind	Respond to of 14162

Ignore this post. Technical editing error. Please see next post.

To: Herm who wrote (11931)	11/28/1999 8:28:00 PM
From: David Lind	Read Replies (1) \| Respond to of 14162

Question for the thread - I am planning a CC strategy that will be a major part of providing an independent income, and this thread has been extremely helpful. But here are some important questions for those who have CC'd for a while. (1) Are the present premium values in general fairly equal to what they have been historically...or at least for the past few years? In making my calculations based on a basket of favorite stocks, I'd like to know that I'm not looking at something that is historically inaccurate for reasons such as current market volatility. (2) And in a related question, have you found that premiums reflect any seasonal factors, such as the typical summer doldrums or fall rallies? What this all comes down to is my desire, if possible, to identify three or four stocks that I can repeatedly CC, while retaining them in my account through their various cycles. Of course, this strategy would appear to be sound only if the stocks held fairly predictable premiums throughout the year, excepting of course those special news or earnings that would move the premiums temporarily. Any thoughts? - David

To: Herm who wrote (11931)	11/28/1999 9:06:00 PM
From: Casaubon	Read Replies (3) \| Respond to of 14162

Well, I've hesitated to post ideas previously because I follow mostly small caps, and they tend to have pretty low open interest. But, recently I've seen some good ideas posted on companies with low OI. So here goes I want to start providing more feedback to this forum because it provided me with so much valuable knowledge. Below are what I consider to be two decent stocks with limited downside that are optionable. The first, PRXL, is a CRO (clinical research organization). Biotech and pharmaceutica companies hire them to manage the human clinical trials for potential drugs. It is my belief that many more drugs will be tested in the coming years due to advances in the way research is done. It makes more sense to farm out this work rather than have many independent companies try to manage the clinical trials themselves. Here's the monthly chart: iqc.com The significance of the monthly chart is that it shows the stock has reached bottom and reversed. If anyone follows candlestick analysis, you will notice lasy month put in a hammer bottom on rising volume and was followed with a confirmation tall white candle which is currently higher than both August and September negative candles. The RSI is low and the DMI indicates the stock is trending higher. The OBV has stopped falling and the 60 min chart shows it is actually rising. The P/E is a reasonable 14.8X, and as I staetd before, I believe the stock could be in a high growth area. Similarly, one could invest in CVD, their competitor. The chart is similar due to failed merger talks between the two. Another possible CC candidate is ABX. The are a premier gold mining operation. There are a lot of politics involved in the price of gold (POG), and gold also is considered to be an inflationary hedge, should one subscribe to the notion that we are about to experience the effects of inflation again. The monthly chart: iqc.com I believe that ABX has put in very long inverse head and shoulders base. The left shoulder bottomed in late 97, the head bottomed in october 98, and the right shoulder has been a very gradual selloff back to the support area of $17 indicating an exhaustion of selling (less urgency in the selloff indicated by the rounded nature of the move). The last peak in gold mining spikes was very rapid, and was the result of an oversubscribed Bank of England auction in late september. Tomorrow is the next installment of their planned auctions. If this auction is oversubscribed the POG will likely make a dramatic move to the upside. The risk of course being the auction does not have a lot of buying support, in which case gold might find itself back at $250, with the mining stocks following suit.

To: Herm who wrote (11931)	11/29/1999 9:53:00 PM
From: jaytee	Respond to of 14162

Hey Herm: Thanks for your detailed answer. Here goes my reply to your questions: 1) How many positions . . . ? I agree. Depends on how much DINERO. But, I could begin to grow a "stable" of prospects to watch/nuture, and get to know real well . . . so that I would understand their temperament when I switched to one of them if I got called out of another (or if it was stagnant) 2) "If one can't read charts how can they make money" . . . exactly my sentiment. This site/software has excellent charting too. And as far as me . . . reading is what I have been doing (3 books now on charting/TA). And I am, as I said, a "hands on " guy. My learning curve shrinks as I DO charting . . . (studying and comparing charts and noticing nuances while making copies for future reference). I'm inclined to believe one will "make money" (on a steady basis) only when one has a "system" (like WINS, for example) fully understands it, and BELIEVES in it and THEMSELF based on the experience and knowledge they have acquired. 3)Plenty of leads right here" . . . How about we have a day of the week for a "deadline" where all so inclined could turn in a prospect accompanied by url's and supportive info (sites, fundamentals & charts) to validate our reasoning. And hand in our homework for you/and the group to share & critique. It might increase "quantity of leads" and further the learning curve of many of us here(and who knows) maybe even make us some MONEY> 4) "Plenty of good chart readers here (for free)" . . . I agree. And appreciate all of you. But, just as my daughter tells me. . . I Just want to learn to drive on my own some day. Not just "go along for the ride"(even though it's a comfortable"back seat" here on your thread). 5)"Reading charts time consuming" Yes, but rewarding and fulfilling. jaytee