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Strategies & Market Trends : Technical Analysis - Beginners -- Ignore unavailable to you. Want to Upgrade?

To: jebj who wrote (8830)	10/24/1998 2:40:00 PM
From: Stu E.	Read Replies (1) \| Respond to of 12039

I'm following idti. Yesterday it went up 5/8 on 2x normal volume to close at 6 3/16. It is now above its 10 and 50 day MA and bumping against the upper Bollinger band. The 200 day MA is over 9. What is the short term implication of the current price/volume action? Does the Bollinger band create resistance, short or intermediate term? I'd appreciate an analysis from those of you out there who are technically talented. Thanks

To: jebj who wrote (8830)	10/26/1998 7:50:00 PM
From: Tom Halkar	Read Replies (1) \| Respond to of 12039

Jb <<Tom, not sure I understand but if I own the stock and sell a call on it - covered call - I don't see how the MF dumping the stock could affect me. Certainly the call is not going to be hit if the stock falls and I can dump the stock - and become uncovered - without worring about it, could I not?>> Regardless of what happens with the stock price you get to keep all the premium if you hold it to expiration. Now let say that your covered call bought you in $500 premium (500 shares $1option premium, which is 5 contracts). The MF(Mutual fund) decide to dump the stock and you just loss $1000 in one day and looks like the stock will tank some more. You have two weeks for expiration and you do not want to hold the stock anymore. First thing you have to do is buy back the options to release you from your commitment for giving someone the right to buy your stock at a certain price. The option price is now 50 cents (500 shares x .50= 250, plus commissions). Now you can sell your 500 shares of xyz at a loss. That why you need to know TA well so you don't pick the dogs and timing is everything. Again, it my opinion that this is the time of year that the MF rotates their stock and can be a volatily time and not for the weak at heart. Does that help you? The books only tell you of the upside and not the downside, which is fine if you are aware of the downside and can live with it. When learning from books look for what they are not telling you and now you have access to real learning. <<In a straddle, you sell both a call and a put on the same stock at the same time period - Dec. 50. >> Sounding like a strategy to applied if the stock is trading in a small range where neither options gets excised or buying insurance for not knowing the outcome of the price movement. I like taking positions in stocks that are volatile with good price movement. There are many ways to make money in the market. Only you can pick the best course for you and the strategies you want to use. Just be aware of there trade offs, because each one has it. Tom The Windy City