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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: Herm who wrote (8254)	8/17/1998 12:58:00 AM
From: virgil vancleave	Respond to of 14162

markets overseas are weak again. my opinion is we are seeing the start of what could be a major bear market. how long it lasts, nobody knows. russia, japan, and much of asia in deep turmoil. noticed that the dow has peirced its 200 day moving average. this is a bad sign. the naz ans s&p are not far behind and are testing their moving averages with the trend being a definite down now. the a/d line is now looking really bad and new lows are leading the show. seems like everyday, new "leaders" are falling by the wayside. take eaii and tlab for example on friday. looking at charts tonight, i find more stocks showing definite downtrends and testing both support and moving averages, many of which have moving averages that are now declining. believe it or not, dell made my short list although the dell chart moving averages still are moving up. dell reports earnings this week. thus, i would wait a little on it or if brave maybe buy some puts. even so, there are still a few stocks showing strength. my favorites are anik, mre, alo, gva, im, pms, sbl, dy, and a few others. the others are gold stocks and the charts look pretty bad for them. the above longs are at or near all time high prices and are at or above technical moving averages. i have positions in 2 of them. now for my list of potential covered puts or short sells. as herm stated tklc chart looking toppy and seems to be unable to break out from a base and overvalued. file nice premiums and it could not break overhead resistanc lately at a prior all time high. now in definite downtrend and overvalued. lcos obvious and good put premiums lhsg this one is kind of wild, but seems to be heading down now. srcm nice downtrend and overvalued. oct premiums look ok imnx another wild rider, but looks like it is starting to fail chartwise pixr trades at 89 time revenues. wow and nice premiums too. this one has really nowhere to go but down. cmgi nice premiums if you can weather the ride amzn it appears that it has stabilized and is basing/forming a top. way overvalued and nice premiums. bldpf i think cabot market letter tags this one. trend on it is now down vod call me crazy on this one, but the system i use just tagged this one as a possible short. it is testing its 50 day moving average. sorry for the long post but i still need to explain how i come up with short candidates and even longs. i believe that what is strong gets stronger and weak will get weaker. thus i buy stocks which are making new highs or close to a high and/or emerging from a base. i won't buy if the stock has tripled or more the past year. for the short side, i follow the stocks which have had the strongest performance and runnups the past year. the more the price rise the better. then using the investors business daily, i check them every so often for the rs and accum/distrib numbers. then i look at a chart to determine if i want to take a position. sounds crazy, but the system works quite well. i have almost a years worth of data to prove it. works about 80 percent of the time. also, as herm does also, i do look at fundamentals and insider trading. i use a price to sales ratio for valuation and include debt and cash in the calculation. fundamentals many times have little to do with stock price, especially in the current market, but they are still important since good fundamentals will drive the stock up in the long run. hope this helps. i will be looking to enter some short positions tomorrow after work. i'll post my positions if anyone wants them. hope this helps and good luck

To: Herm who wrote (8254)	8/17/1998 10:25:00 AM
From: VincentTH	Respond to of 14162

COMS looks like another candidate. The stock has run up from the low $23 to $30 based on takeover rumor and better earnings expectations. Short Interest Figure from viwes.com Item Ticker Company Name Month Shares Short Avg Daily Ratio* Remark Volume 1 COMS 3Com 07/98 11,560,201 9,220,221 1.25 Corporation 06/98 12,297,308 5,906,227 2.08 05/98 11,974,076 5,908,920 2.03 04/98 12,431,681 7,429,801 1.67 Key Statistics (from MSInvestor) Zacks ConsensusModerate Buy Qtr EPS Estimate$0.21 FY EPS Estimate$1.29 Current P/E Ratio364.80 P/E on FY EPS Est.42.80 Dividend Yield0.00% Market Cap10,465.4 Mil Shares Outstanding358.6 Mil Daily Vol (13 wk avg)7.4 Mil Institutional Ownership56.00% Beta1.7 Short Interest Shares11.6 Mil