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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Carlson who wrote (4552)	1/22/1998 11:17:00 PM
From: HoodBuilder	Respond to of 10921

I have not studied the sector for mergers and acquisitions. Book value does IMO set a floor but at this point we're pretty far from book on KLIC. I just received an email as follows. . . Briefing "expect[s KLIC] to recover in the days ahead and fill gap resistance at 24-5/16." Where these guys came up with this I have no idea, but I'll bet they weren't on the conference call. The days ahead will be tricky and if KLIC behaves like KLAC or some of the other semi equips, i.e. ASMLF recent entrants will likely exit and NOT wait for the road to recovery. As far as covered calls, I was very bearish going into the report and wrote the Jul 15's @ $6.00. I will probably close them if we trade to the $16 - $17 range but keep my Feb 20 Puts and close my Feb 17.5 Puts. I am long Apr 20 Puts and will probably keep them as long as there is Asian turmoil as the semi equips will react negatively on a moments notice. Following my Jul 15 Call closure I'll reevaluate the market and look 2 months and 1 strike above the then current price for a call write. With KLIC's volatility I plan to decrease my cost basis through covereds by 20 - 25% by summer. If an upturn is on the horizon I'll uncover and take the risk and the ride. As a closing note... I DO NOT THINK WE'VE SEEN THE BOTTOM YET, in spite of the "experts" comments. There are too many Sell Side Brokers with Outperform and Buys on KLIC and we WILL see adjustments in the next few days. 2 or 3 neutrals or holds will hit the stock for at least $2-$3.00 and possibly more. I cannot overstate the type of trading activity I witnessed today. Few Big Boy Buyers, Lots of SOES Buyers (who mean nothing) and a lot of Big Boy Sellers. My guess was that since Montgomery was KLIC's lead underwriter they talked up the stock to their clients and had a ton of "buy on the dip" orders. I can hear them now, " The worst is over, 8000 series is high margin, we have it directly from the company that things are OK" I have one thing to say "SHOW ME THE MONEY!" When we return to double digit sequential earnings growth I'll be back pounding the table. For now, and as long as Asia is in shambles, I'll be content to write covereds, and hope for beter days.