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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: PCSS who wrote (32300)	9/4/1998 9:59:00 AM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

Analyst BEARISH on CPQ Sep 4 1998 8:05AM EDT 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). For more on Bernie Schaeffer's recommendation see "Aggressive Portfolio," September 1998, The Option Advisor. Bernie Schaeffer and his staff provide practical options recommendations that are simple to understand and execute. investools.com