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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: RayV who wrote (8687)	9/26/1998 10:39:00 AM
From: Herm	Read Replies (3) \| Respond to of 14162

Hello Ray and Lurkers, REVIEW OF TECD The question was: I sold CCs for the DEC 45 calls at that little down turn in RSI you see near the right side, and I still think my decision was sound and I will make a good profit if TECD stays anywhere above 27, but now I'm intrigued by your Selling Against The Box technique. Does it have a place in situations like this? I see TECD is bid at 52 a few moments ago. As always, your thought and insights are greatly appreciated. askresearch.com TECD KNOWN FACTS Take a look at the chart and you will see that TECD has been working on attempts in making a new 52-week high since the end of July. It appears Greenspan's potential interest cut helped TECD make a new high when the NASDAQ took off this week. TECD earnings projections have been zig zag with recent estimates: [ $2.27 - 09/23/98] [ $2.32 - 09/18/98] [ $2.27 - 09/17/98]. It seems everybody is trying to pin down the number. The next TECD earnings report is due out on 12/02/98. So, we have lots of time! TECD P/E TECD is selling for top dollar and is little P/E rich at this point! The average TECD trading volume lately has been 435,500 and you can see below the gap upward is petering out and the smart money is clearing the money off the table! NASDAQ: (TECD : $52 7/16) $2,526 million Market Cap at September 25, 1998 Ranks 282nd in the Fortune 500 on Revenue & 695th on Profit. Employs 3,405. Trades at a 38% Premium PE Multiple of 22.6 X, vs. the 16.4 X average multiple at which the Retailers of Electronics & Computers SubIndustry is priced. Date Close Change Day High Day Low Volume Sep 25 52 7/16 + 7/16 +0.84% 53 1/8 51 1/8 435,500 Sep 24 52 + 9/16 +1.09% 52 5/8 50 3/4 783,800 Sep 23 51 7/16 +2 7/16 +4.97% 52 3/8 48 1,274,700 Sep 22 49 + 5/16 +0.64% 50 1/16 47 7/8 1,368,900 Sep 21 48 11/16 +2 3/16 +4.70% 48 7/8 45 499,600 TECD SHORT INTEREST TECD is showing signs of increasing short interest relative to the trading volume. At such high levels it bound to increase. When the Sept. figures come out we should see an increase. Perhaps there was an initial mini short squeeze with the recent price gap and it will settle down and drag TECD back down to earth. There is no way TECD will continue past the current P/E straight to the Dec. earnings! Month Shares Short Avg Daily Volume Ratio* Remark 08/98 611,297 388,212 1.57 07/98 776,748 683,794 1.14 06/98 488,015 487,651 1.00 05/98 491,617 559,754 0.88 04/98 919,474 946,495 0.97 03/98 633,040 760,244 0.83 I will handle the dialog on shorting against the box separately! Your CCs grabbed a good some of premies. I would hold the TECD position since Dec. is a LONG time away and TECD is bound to be hit by profit taking soon! You Dec. expiration will save your beacon.