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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: Yakov Lurye who wrote (11970)	12/26/1997 11:29:00 AM
From: H James Morris	Respond to of 25960

CQG JAN 15 CALL 1 1/4 1 3/8 CQG FEB 15 CALL 1 15/16 2 3/16 CQG MAY 15 CALL 3 3 3/8 These are the current call prices for Cymi. Yes they are expensive. I think if you want to buy, you might be better off paying the extra 3/4 and get another 30 days of relief. I myself am looking at the may calls. Good Luck

To: Yakov Lurye who wrote (11970)	12/27/1997 1:00:00 AM
From: Yakov Lurye	Respond to of 25960

Re: JAN15 calls Since I'd received two e-mails inquiring about short-term CYMI price forecasts, I've decided to post my reasons for buying Jan.15 calls. I've been wrong predicting CYMI price movements too many times, and will not be surprised to be wrong again. 1) On the positive side, for the last two weeks, trend in semis (judged by SOX) seems to have turned positive. Both SOX highs and lows seem to be inching upward. That was not the case in November, when SOX highs continued to trend lower. Stronger semi-equips like AMAT and TER do exhibit a similar pattern. This may be a temporary reprieve, but chances are good for the upward trend to continue in early January. Note that in the last two months breakdown in SOX occurred in the middle third of the month. 2) CYMI has diverged from the leading semi-equips, unfortunately in a wrong direction. To some degree, current CYMI valuations are consistent with analyst consensus projections. AMAT trades close to 15xFY98 earnings forecast, so does CYMI. Of course, the majority on this thread thinks that FY98 consensus of $1.03 is low. IMO, current CYMI selloff is not based on "in-advance" information about a bad quarter, but is largely tax-related. Also, at this time of the year fund managers try to get out of losing positions to make their portfolio look better at the end of the year. 3) IF the short-term upward trend in SOX continues and IF the current selloff in CYMI is tax-related, short-term, CYMI stock price could improve. Until recently, 10 point change in SOX roughly translated into $1 change in CYMI stock. For example, latest SOX drop from 300 to 250 "shaved" about 5 points off CYMI. Notwithstanding this weeks SOX/CYMI divergence, I expect this relationship to be restored. If SOX manages to get to 275 (i.e. exceeds last short-term high), CYMI should go up at least by 1.5-2.5 points. To this extent, JAN15 calls @1.25-1.375 require a fairly small cash outlay and for the NEXT 5-10 trading days seem a reasonable proxy for increasing a long position with limited downside risk. Of course, all the usual disadvantages of buying calls rather than going long do apply. Slightly off topic, one good thing about CYMI options is that they are traded on three exchanges. I would definitely avoid options traded only on Pacific exchange. One more caveat: one of the Needham's funds managers had stated that he had recently liquidated his position in CYMI. Since Needham was one of the CYMI underwriters, this may not look good for investors that have no position in CYMI. Of course, Needham is near the top of Curly's suspects list. Y.