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Technology Stocks : Novell (NOVL) dirt cheap, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: Paul Fiondella who wrote (24789)	12/28/1998 4:28:00 PM
From: Wallace Rivers	Read Replies (1) \| Respond to of 42771

*OT*Pls. take this p.....g match elsewhere. Most of us would rather talk about the future of NOVL, which IMHO is great. Those who have been around a while (years) have suffered sufficiently.

To: Paul Fiondella who wrote (24789)	12/28/1998 4:37:00 PM
From: EPS	Read Replies (1) \| Respond to of 42771

This is exactly what I meant when I said that you need to raise the level of your posts. At any rate I have no time for this kind of high school competition to see what... The quality of your analysis is well documented by your own commentary, and so is mine. Give us good stuff Fiondella. VD == Like this: Options outlook Price Headley of Schaefer's Investment Research agrees with Murphy on Apple. But his firm will play it in stages. SIR started recommending Apple when it was 37 15/16th and Headley says "we're targeting a move to 42." They also recommend options and note that the Apple January 35 Calls were trading at 5 1/8th when they said the stock looked bullish. If Apple does go to 42 by the time that Call approaches expiration in January, the option contract should be worth about 7. But Headley notes: "if it happens in the next week or so, it should be trading more like about 8 1/2 because of the time value of the option contract." Headley also likes Novell (NOVL). "You've seen the stock finally have a good turn around on the longer term chart, the 10 month average crossing above the 20 month average. That hasn't happened since the early 90s when the stock went from about 5 up to 30 in about a year and a half." He notes the company has posted two good quarterly earnings surprises and they'll next report in mid to late February. So he says you could buy the May 20 Call options contract now for about 1 9/16ths. "30 is our target later into '99 on Novell, but our first target is at 22 1/2, which, if we had a fairly quick 5 point move, you'd be looking at the May 20 Call options worth in the neighborhood of 3 to 3 1/2." On the broad market, Headley is also cautious in the near term. "I think short term some sort of a consolidation is probably soon to be upon us here. I'm thinking it's close to hitting now. …I wouldn't be selling based on that, but I'd be saying as an options trader you have to be a little cautious of the market maybe flattening out after the big rally it's had in the short term." Bullish on '99 Headley differs with Murphy on where the market's headed in 1999. Headley's very bullish. "You've got the third year of the election cycle, where if you look back, in third-year election cycles, it's been a double digit gain all the way back to 1963 every time but once, and that was in 87, where you had the crash in October, but you still finished up that year." He says every other year going back to 63 has been a double digit positive: "'95 was up 34.1 percent and '91 up 26.3, so we've really turned up the heat here in the last couple of third year cycles." Headley points out that the election cycle usually tacks on 50 percent from the Dow's low in the second Presidential mid-term year, to the high of the third year. That would take the market from last summer's 7400 to 11,100. "My gut is that when we get through 10,000 the run up to 11,000 could be potentially pretty quick," he says, but warns, "at some point we will get pretty close to the 11,000 level and I think at that point you probably want to take chips off the table because I think we'll have come too far too fast and then probably be due for a settling." cbs.marketwatch.com