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.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: eplace who wrote (94282)	2/20/2000 2:01:00 AM
From: Joe NYC	Respond to of 1573434

What are your options strategies for March and April? I will probably sell March 50 calls on a rally, but for April, I don't think I am going to write any. I think AMD announces before the option expiration, and I think the numbers will be very good. I am thinking about buying some LEAPS. I was about to buy some January 01 45 calls on Friday late in the afternoon, when the price dipped to $40, but my order didn't get processed in time. Joe

To: eplace who wrote (94282)	2/20/2000 2:21:00 PM
From: niceguy767	Respond to of 1573434

eplace: Re: "hey niceguy...........What are your options strategies for March and April? I foresee some continued weakness in the markets, but AMD hasn't taken part in the it for the most part (except maybe a little manipulation on Friday afternoon). I see AMD getting stronger towards earnings in April, but do you see any spillover from the markets keeping AMD going sideways or slightly lower for the immediate future? If so, would you write some CC's on your shares for March?" Comment (1):Fundamentals: AMD's fundamentals (assumptions: exceedingly strong flash and exponentially growing "spry Athy" shipments and great bin-splits)remain outstanding as it appears they will own the top-end of the microprocessor market place for the remainder of Y2000 and probably a good deal longer! Such strong fundamentals at some point will cause the price of AMD to erupt in a volcanic-like manner taking it to a much higher price level...Personally, as Paul likes to point out, I'd have thought that AMD would be at $50 plus by now, given the Feb. 11'th suggestion by Mr. Sanders that Q1 revenues could exceed the record breaking Q4 revenues...i.e Q1 revenues will break the $1 billion barrier! These fundamentals will ensure prices higher than the current $40.25 by both March and April expiry dates...How much higher depends on overall market risk and estimated Q1 eps, currently $0.39 by the street analysts...(Personally, I don't see overall market risk as having anything but a knee-jerk effect on AMD owing to AMD's stong fundamentals and I can't imagine Q1 earnings coming in at less than two times (i.e $0.80, just ask DRBES) current street estimates. Based on company fundamentals,AMD remains exceedingly undervalued at $40.25! ( I think there is an outside chance that AMD Q1 will be greater than $1.00) Comment (2): Technical Perspective: The 3 month chart shows that the upper and lower boundaries formed by parallel lines across the tops and bottoms of the daily ranges remains in tact at Friday's close of $40.25. It is worth noting that these boundaries are rising at the rate of about $2.00 per week, which, assuming integrity of this pattern over the next 10 weeks will result in a minimum price of $48 by March expiry and $56 by April expiry with upper boundaries of about $58 and $66 respectively...On Friday the trading range was delimited by boundaries, +/- $2.00, of $40 and $50 respectively...At $40.25, AMD is clearly in the buy range. A shorter term trading pattern of significance is the penant formation that began to take shape in mid January bounded by a horizontal line through $45.25 and the lower boundary of the 3 month chart. It is interesting to note that closure of this pattern must occur prior to the March expiry date. An AMD close outside of this penant formation will introduce a new short tem trading range. A close below the lower boundary will see a test of $38 and possibly $35, although I doubt it. The more likely scenario is a close above the $45.25 upper boundary which will then pave the way for tests of the all time high of $48.50 and the upper 3 month boundary in the $50 range... Any close outside the upper boundary of the 3 month trading channel would signal another major upleg, possibly very abrupt, in nature and resulting in a test of the upper boundary of the 5 year trading channel somewhere between $58 and $63! The foregoing scenario could easily unfold by April expiry date, given that Q1 earnings of $0.80 or better, imho, will be released prior to April options expiry date and at the latest will unfold by July options expiry date. My Overall Strategy: I have been accumulating April and July call options based on the foregoing fundamental and technical outlook...April and May $50's currently look very attractive to me! I am definitely not selling calls...If I wished to be less aggressive, I'd sell puts!