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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: Michael Hart who wrote (8946)	11/5/1998 7:44:00 PM
From: the options strategist	Read Replies (1) \| Respond to of 14162

Thread, TMR-out of base on the upside TEK-breakout KM-broke above sept hi on good vol POSS-broke out of base NS-breaking out of base BS-steels are moving LTV-breaking up from base (STEELS HAVE BEGUN TO MOVE) CNK-broke out of base TXB-not optionable but broke above oct & sept highs Have not gone beyond technicals on any of the above. Don't know if they are good cc stocks are not. Have a few more that I will place here before the week-end. Jen

To: Michael Hart who wrote (8946)	11/9/1998 8:20:00 PM
From: Herm	Read Replies (1) \| Respond to of 14162

Hi Mike, CS - PULLING BACK - LOCK IN CCs in the money! As of today, CS is pulling back after the upper BB tag and very high RSI. The price should pull back to the lower BB band as the RSI drops off. That's for that tip off! askresearch.com ---------------------------------------------------------------- QUESTION "Your W.I.N.S. approach would seem to scream that CC's be sold anywhere during the past week on CS ( penetration of upper BB's and RSI approaching 80 ) but I'm confused about how you interpret a potential "breakout" which would hold you back for a time period. Next earnings are due in December and could cause a breakout if CS exceeds by any amount. Do you wait for a pull back from the upper band combined with a continued high RSI ?" Please take a look at the chart and let me know what you think. Congratulations on a great thread."</b ANSWER Thanks for your question and interest in our forum. Using your CS to answer your question. When CS bottomed out $6+ back in Sept. 1998 the RSI was very low. Not the lowest it has been, but low enough. Below is a review of the P/E value for CS. Back in Sept. CS was selling for way below the other stocks in the group. So, some upside rebound was an event waiting to happen. All those months of CS going sideways and downward encourages investors to short the stock to make a profit. The CS growth rate is only 17.7% annually. With a P/E of multiple of 34.5 it's no bargain compared to other stocks. CS has now reached a price level where everyone for the past six months can dump the stock and MAYBE break even! I would bet CS will now tag that lower BB for sure! It would take a major news event to over come that resistance. NYSE: (CS : $12 7/16) $1,961 million Market Cap at November 9, 1998 Ranks 876th in the Fortune 1,000 on Revenue & 432nd on Profit. Employs 5,375. Trades at a 18% Discount PE Multiple of 34.5 X, vs. the 42.1 X average multiple at which the Networking SubIndustry is priced. I still believe the low RSI, increased short interest, and a discounted P/E will always result in an eventual upward gap! That is the best explanation I can think of.