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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: Wayners who wrote (8472)	9/4/1998 9:25:00 AM
From: Herm	Read Replies (6) \| Respond to of 14162

Hi Wayne, I don't know if you are long or short on CPQ. I don't currently hold any positions in CPQ. I'm really leaning towards shorting CPQ from a technical standpoint. CPQ is hovering below CPQ's 200-day average. A merger means more overhead cost and dead weight initially. The next earnings report will not impress the street and the MMs will further hammer CPQ to heart stopping levels of at least $20 and perhaps lower. The $20 CPQ last bottom was set when market condition where much better than they are now! Mention weakness, and the shorts will hammer it to death. "Perception in the stock market often becomes reality." CPQ is showing the signs right now! Sideway motion with a right downward slanted RSI spells TIMBER! bigcharts.com Here is an options technical heavy hitter putting out the word: Speculator Puts It To Compaq (CPQ) Thursday, September 3, 1998 "Market sentimentician Bernie Schaeffer cites a number of reasons to be bearish about technology bellwether Compaq Computer (CPQ). For instance, the number two PC supplier has not seen new price highs since competitor Dell Computer, announced estimate-beating earnings in mid-August. Schaeffer also says Compaq dropped the ball on the rollout of Intel's low-cost Celeron chip, which was designed specifically to cash in on robust growth in the market for PCs priced below $1,000. These and other Compaq stumbles are showing up in the stock's recent performance. Though CPQ rallied on August 18 to near its October 1997 all-time high of $39-25/32, the stock has since headed south and now sits below its 50-, 100- and 200-day moving averages. That said, options players have been steadily adding calls on the shares; Schaeffer says total call open interest of over 322,000 overwhelms total put open interest of over 107,000. He also points out that over 30% of this call open interest is in the out-of-the- money 35 call strike and 18% of it is in the 40 strike. "The fact that there have not been widespread out-of-the-money call liquidations, in the face of a pullback from former all-time highs, bodes well for our put position," Schaeffer says. On August 27, he recommended buying the January 40 put (CPQMH)." I just might pickup some cheap CPQ PUTs today!