Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: William C. Spaulding who wrote (58397)	8/15/1998 8:10:00 AM
From: tsyl	Read Replies (2) \| Respond to of 176387

A few words about Dell's possible price movement.... Mr. Spaulding, As usual, you appear to have option activity all figured out. Lets take a slightly less dim view of the world using recent historical FACTS. -January 26 MSFT announces 2:1 split. Stock runs from $136 to $154 and splits down to $77 (approx). Six months later, With Naz 2K, MSFT hits $117. A $40 move after split. -February 14(?) LU announces 2:1 split. Stock runs from roughly $95 to $125, splits down to $67ish. Five months later, stock hits $108. Another $40 move. -February 14(?) DELL announces earnings and 2:1 split. Stock runs from $118 to $140 before being slammed down to around $130 in Tech down draft. Splits down to approximately $65. Runs, as we all know, to $118. A $50 move. My point for this customarily long-winded retort is that the "big boys" in the market make big moves following split announcements. A perponderance of big caps got ahead of themselves recently - DELL included. However, the Dell run up in June/July does not preclude another moderate to substantial move post earnings/split announcement MKT PERMITTING. The stocks mentioned all slowed due to mkt conditions - not company fundamentals. I dont expect these stocks to rocket forward constantly. Defies nature. Jerry Favors, TA guru and my personal hero (not), sees next week as important - the possible beginning of the quickly-faltering secondary rally. It may help Dell.

To: William C. Spaulding who wrote (58397)	8/15/1998 7:17:00 PM
From: AlanH	Read Replies (1) \| Respond to of 176387

William, interesting points on DELL call prems. In my opinion, a nice play might be: purchase calls (at/near-the-money) on Monday afternoon and sell near the close on Tuesday. Historically, I've observed this to be a low-risk, profitable play. (Some folks might complain about not letting profits run beyond Tuesday.) Here's a possible scenario that would assist the play: * Monday has the potential of being a down day. (At a minimum, it shouldn't be a strong up day given Clock-gate.) * Tuesday looks good for a short-term reversal (both on fundamental and technical grounds). I'd expect a swift and pronounced rise in the major indices. * A nice rally on Tuesday could be viewed as constructive for the market, encouraging participation of "parked" cash. Companies perceived to have strong track-records should be the grandest recipients. * Investors/traders which have been cautious (yet optimistic) may react to any upward move prior to DELL earnings -- not wishing to "miss the boat." More gasoline! * Given the above, Tuesday's close has the potential of being at or near the highs of the day. (A slight pull-back in the final hour of trading is reasonable, but should not erase the bulk of gains.) Someone made off with my crystal ball some time ago, so this little sketch is one man's speculation. That said, a Monday close of ~104-105.5 would not be surprising; Tuesday's gains have the potential to exceed 3-5 DELL points. The nice part about the play is that it's not implemented until/unless Monday's action has unfolded. IMO, discipline is required in three key areas: i> avoid the play if DELL has a strong run on Monday [contrary to TA]; ii> set mental stops and commit; iii> close the position by Tuesday's close DESPITE TEMPTATION. For those hell-bent on holding calls past Tuesday's close, out-of-the money Aug/Sep calendar spread/s would accommodate the premium drift mentioned in #58392. *** ONLY an OPINION. Actual mileage may vary, void where prohibited by law, federal&state taxes may apply and are the sole responsibility of participant/s. CA residents may have addtn'l benefits, including but not limited to the great outdoors. GT, Alan