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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: Tony D. who wrote (6522)	1/22/1998 7:19:00 PM
From: Douglas Webb	Read Replies (1) \| Respond to of 14162

What are your thoughts on CREAF? If it braeks 20, I will try and write May or June 17.50's. (I'm in at 17.75.) Watch this one closely. The earnings report will be released after the bell tomorrow (1/23) so on Monday we'll see the initial reaction. Odds are the estimates will be beat and we'll gap open on Monday, and hopefully climb at least a couple of points. I expect we'll hit resistance at $22.50 or $25, then come back down about halfway before there are any further gains. What's halfway? The uptrend we're in now started at $17 5/8 a few days ago; We'll probably establish a support level halfway between that price and whereever we peak after the earnings report. How long it will take to get there, and where we'll go next, are anybody's guess. I wouldn't be real comfortable with those longer-term calls, though. This is a really undervalued company, and it's likely that your calls will be in the money from now until expiration. There is a chance we could dip down to $17 or less again in the near term, but as the year progresses, and the market realizes that the problems in Asia actually help companies like CREAF (with their costs in Asia and their earnings in US and Europe) the price is going to stay up. If we do dip down, your long-term options aren't going to drop in price much because they have low deltas, so you're not going to get an opportunity to cover them. Doug.

To: Tony D. who wrote (6522)	1/23/1998 8:46:00 AM
From: Herm	Read Replies (2) \| Respond to of 14162

CREAF earnings should be out real soon. The overhead resistance is should start around the $20 to $21 range. The MACD is about to cross over into a long term buy. The RSI is increasing. According to Doug's 3-Line chart set at high sensitivity, CREAF has a confirmed buy signal. The medium setting is just about to signal a buy if CREAF hits around $20. The Asian Flu has rubbed off CREAF. Since, they have so much America cash on hand I can't imagine them getting hurt selling their goods here in this country! webbindustries.com