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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: ViperChick Secret Agent 006.9 who wrote (6796)	3/12/1998 12:51:00 PM
From: Chris	Respond to of 42787

if you look at my chart, there is small TS symbols.. that is a sell signal daily.. it's very accurate.. give up a little from the peak, but it works well. for the buy side, that super ma crossover works nicely (with dns scan hits) yee haw.

To: ViperChick Secret Agent 006.9 who wrote (6796)	3/12/1998 3:50:00 PM
From: Robert Graham	Read Replies (2) \| Respond to of 42787

I think TA on options has limited benefit. For that matter many options are traded in an illiquid market where TA will not apply as well. I find that following the underlying security along with knowing how the option can behave with respect to the security works for me. I use option pricing models to help me with measuring how much time value has already been priced into the option. One tip is to choose an option on stock that demonstrates good price momentum in a well-established trend. It is important to see good evidence of accumulation by the large money. This type of price behavoir of stock I find many times is not priced into the option. The option actually can be found to sell below what I would consider its "fair value" in this situation considering the strong price momentum of the stock. The closer to "fair value" an option sells at, the less likely the value of the option will drop due to volatility in the time premium part of the option. This is not to say that there is not time decay. I am talking about the time premium that is priced into the option as the result of speculative participation in the option. There have been times where the stock did not break out as I expected it would and stopped at a resistance that I would consider a bit below breakeven for me. However, the time premium of the option expanded due to a recent move in the stock that did get the attention of option players and allowed me to derive a small profit. This is a case of strategically allowing the time premium component of the option work to your advantage as a trader instead of the being the exclusive advantage of the writer of the CALL option. Bob Graham