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Strategies & Market Trends : Point and Figure Charting -- Ignore unavailable to you. Want to Upgrade?

To: Ms. X who wrote (2833)	5/7/1998 2:24:00 PM
From: Ms. X	Respond to of 34810

THE RIGHT STOCK -DWA Commentary Many investors ask the question "What's the best covered write right now?" In many cases, what they really want to know is: What covered write has the best "numbers" or the best returns right now? However, the numbers are "theory". And they are often the most volatile stocks. In "theory" a certain August 55 covered write will generate a 35% called return or a 23% static return. In "theory"! Reality of course is something else again. The "numbers" or returns will do you no good if the stock declines. You cannot ignore the fact that you must be in the right stock in order for the covered write to work. In the above example, if the stock is above 55 on the third Friday in August, you will make an annualized 35% on your money. On the other hand, if the stock is below the breakeven price, you will lose money. Having not done your technical homework, the stock could have just as good a probability of trading below the breakeven as it does of trading above 55. This is why we chart over 1500 stocks by hand every day. This lets us know which stocks are technically strong and have a higher probability of success. Knowing this will increase the odds of having a successful, profitable covered write. Staying away from the extremely volatile stocks also helps us avoid "surprises". So, when looking for covered writes, remember you must select the right stock. Ask "What stocks do you like right now?", not "What is the best write today?" This will put you in stocks where you can achieve the best returns with a high probability of success. ----- Market Commentary: Stock Band Aid 5-05-97 Message 4339130 Market Commentary: Higher Highes- Higher Lows 5-5-97 Message 4325705 Market Commentary: Black Gold 5-1-98 Message 4296099 Market Commentary: A New Dawn 4-30-98 Message 4275191