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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 (12278)	1/28/2000 7:40:00 AM
From: Herm	Read Replies (1) \| Respond to of 14162

Hey Dan and Ryan, CPWR has really taken a hammering! WOW! When those funds take their money off the table its TIMBER! CPWR had a good run at the end of the 1999 year. And then! Bamm! NASDAQ: (CPWR : $20 9/16) $7,915 million Market Cap at January 27, 2000 Trades at a 73% Discount PE Multiple of 16.5 X, vs. the 61.4 X average multiple at which the Software & Services SubIndustry is priced. The chart profile sure does indicate the bottom has not been reached yet. It look like CPWR will test the $18.00 and then experience a technical rebound like the last dump. askresearch.com IFMX continues to do the yo-yo and I'm relieved IFMX stalled at $15.00 like the chart suggested. I hate to see any body get killed. But, it sure does reinforce my reliance on the technicals. Like you said Dan, the company is making money and is underpriced and still it moves in cycles. We just need to "let the trend be our friend." I wrote my CCs a bit early this time around for the May 15s. So, I may not make as much this round. It's too early to tell. But, I am using the money for other plays. DOX I decided to make a move on this runaway gapper of mine. This turkey would not quit as it took off. I covered my CCs at a loss, but, picked up some good equity in the stock price. Yesterday, all hell broke loose on DOX and started to show the coming breakdown. So, I shorted 300 shares rather than writing the calls because of low open interest at most of the strike prices. NYSE: (DOX : $53 3/4) $10,764 million Market Cap at January 27, 2000 Trades at a Premium PE Multiple of 76.8 X, vs. the 35.0 X average multiple at which the Data Processing SubIndustry is priced. Data Processing SubIndustry down <1.10%> / Services Industry down < .69> Today Yesterday's DOX trading volume was MASSIVE! The stock had a swing of 7 points at one point. Take a look at the sweet looking chart profile. Classic narrow channel between the upper and lower BBs indicating low volatility and pending gapper. Then, pop it goes straight up sharp and fast. DOX pegs the RSI at 90 and OBV peaked big time. The volatility in the DOX BBs are extremely wide and will close in as the stock corrects from profit taking. The earnings release just took place this week. So, there is not much holding the DOX up from this point until the next earnings cycle. askresearch.com DOX Trading Summary 27-JAN-00 Ticks Money Flow($MM) Avg. Price Small Blocks +249 -372 +17.2 -22.5 52.8246 Large Blocks +21 -29 +21.9 -37.7 53.6106 Total: +270 -401 +39.0 -60.2 <-- 53.2939 26-JAN-00 Ticks Money Flow($MM) Avg. Price Small Blocks +302 -218 +16.0 -11.3 57.1154 Large Blocks +16 -21 +20.4 -46.5 57.0074 Total: +318 -239 +36.4 -57.8 <-- 57.0387 The exit started on the 26th. Notice that the price peaks at $57 only because the MMs are planting up TICKs in order to facilite shorting of the stock. You can only short on an uptick. In short, they are generating sales of DOX stock at a higher price (and increasing the liquidity). Eventually, the musical chairs gingo stops and the DOX stock price dumps! Bingo! Panic selling and shorting against the box takes over. Everyone heads for the exits! There may be a pull back to perhaps the low 40s level before DOX levels off. It is much easier to feed the panic and short the stock at this point. This process occurs over and over again in practically ever viper stock.

To: Dan Duchardt who wrote (12278)	2/8/2000 8:07:00 AM
From: Herm	Read Replies (1) \| Respond to of 14162

IFMX Here we go again! Yesterday, IFMX finally broke upward past the $15.00 barrier to close into a new range of $16 plus. That price level has not been seen for quite some time. My current CCs was at the breakeven and decision time to either cover at a breakeven, wait for a slight price increase, and roll into a new round of CCs before the stock peters out. Here are the current factors and the daily chart profile that leads me to believe IFMX may have a tough time climbing up from here. siliconinvestor.com 1. IBM just announced a law suit against IFMX for patient infringement. Well, that is for a court of law to decide. But, it does not may it any easier to have a massive gorilla like IBM on your case. IBM sure does have deep pockets. biz.yahoo.com 2. IFMX news was hitting the streets and boosting the IFMX price lately. The chart was showing signs of a pull back and potential sideways period. Factors? High RSI, a tag of the upper BB and elongating upper BB with the center moving average in the center moving upward. But, that was before this lawsuit announcement. Those poor folks waiting at the $15 since April 1997 will most likely dump at the first chance. SUMMARY? Hummm? I like IFMX and my nut is way down in the $6.00 range. I'm tempted to cover my CCs for the May 15s and cash out or perhaps short against the box and wait it out. After all, they has to be a downward bias until this law suit is settled. Lawyers and countersuits all cost money and impact the bottom line. IFMX does not need another period of struggle at this point. You folks that are not IFMX may be able to take advantage of the news and the knowledge of the downward pressure on IFMX. It does not matter which way IFMX or any stock is moving. You can make money using the right WINs sideshow tool. Traing Approach? The MMs might force IFMX to open slighly higher and then gap downward today. If they have markte sell order waiting the MMs will boost the IFMX price on an uptick to gather enough stock to short. That will give them enough IFMX shares to meet those sell orders. Next, they let the IFMX trap floor drop to lower the IFMX price to trip those stop loss sell order and in order for the MMs to cover their short positions at a profit. What a sweet deal for them. Like clock work! I might take advantage of that fear and flight out of IFMX to cover my CCs at the bottom. The MMs will rebound IFMX to trigger the buy orders for bargain hunters. I might short IFMX at that point. My intent is to freeze my profit in IFMX until the dust settles. If IFMX goes down, I'm protected. If IFMX goes up, I'm protected. The clock freezes either way.