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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: Mike Scott who wrote (11966)	12/1/1999 8:38:00 AM
From: Casaubon	Respond to of 14162

I purchased 200 shares of PILT at 22 3/16 last week based on a chart that showed upper BB tag and high RSI. I then sold 2 ARR 17.5C for 9 1/8. The stock has droped to 17 and the calls I bought are worth approximately 4 3/4. You do mean the calls you sold, right? You are indeed correct. The weekly chart implies the stock will cycle down to the $10-$14. iqc.com The weekly 3 candle pattern is reffered to as an evening star reversal. The sixty minute chart implies a technical bounce is due but, it should be limited to about $19. The stochastics and DMI suggest the stock is now downtrending. The OBV continues to decline which supports more downside and the weekly and daily RSI have reached their limit supporting more downside. This stock looks like it has quite a bit of volatility. edit: Be careful about costs. I can't justify the expense to use options on only two hundred shares at my broker.

To: Mike Scott who wrote (11966)	12/1/1999 8:44:00 AM
From: Herm	Read Replies (4) \| Respond to of 14162

Hello Scott! I'm trying to understand your motive for buying PILT. The TA indicators was showing a speculative stock with no earnings making a potential new 52-week high. This stock has a very short history. So, it is really bold taking on the stock at current price levels and then CC. Had you paid $10 and PILT was peaking and you wished to remain long in the stock, the CCs would have been a good defensive move and a good way to lock in the profits in the stock capital appreciation and let your CCer pay for your insurance. Cashing out would have been easier if you just wanted the pure profit. To make your entry just as the stock is going to reverse is taking on unnessary risk. It's like jumping on that bull rider in country bar without any practice or idea of what to expect. PILT NASDAQ: (PILT : $17) $237 million Market Cap at November 30, 1999 Loss Expected for 1999; Internet Products & Services SubIndustry priced at 295.0X PE siliconinvestor.com I see a skyhigh RSI, high OBV, and Stocastics going just about to go negative. Bottom price support appears to be around $11 to $12. I would venture to say you have a downward bias with perhaps some sideways motion. Again, not my choice for jumping on a CC horse. Get ready to cover! We will work on that chart reading some more Mike. :-) Thanks for sharing that with us!