Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Casaubon who wrote (9523)	1/24/1999 9:45:00 PM
From: virgil vancleave	Respond to of 14162

Take a look at a long term chart. Notice how it seems to be trading in a range? The top seems to be at 25 and the bottom at around 10. Add to that is the fact that the current trend is down, thus giving a target of 10 before "long term support" come in and holds it above 10. At that point I would be a buyer and even sell some covered calls. Hope this helps. good luck Chart can be found at the following link. quote.yahoo.com

To: Casaubon who wrote (9523)	1/25/1999 8:45:00 AM
From: Herm	Read Replies (1) \| Respond to of 14162

Hello Again Casaubon, Vigil reply was right on the money with his answer. You will find that plotted technical charts can give you 80% of the story of where a stock has been and where it is going. It is the summation of all activites (be it buying or selling) for that stock! The charts don't lie! But, the hints can be subtle at times. That is when fundamentals like P/E, short interest levels, news, open interest, and earnings release dates can be of further assistance. What I have learned is, it does not matter what you or I think about the stock, the numbers and the charts spells it out! MUEI will most likely form a double bottom before the bottom fishing starts! Also Casaubon! It does not matter if the stock is going up or down! If you know which way it may go during those cycles you can make money! That does not mean you hit home runs every time. But, those doubles and triples sure add up fast! Thanks for the question!

To: Casaubon who wrote (9523)	1/29/1999 5:23:00 PM
From: Herm	Read Replies (1) \| Respond to of 14162

BTGC - Lower BB tag and rebound - Up 10% Today! BTGC completed it's downward cycling down and bounced off the lower BB this week according the W.I.N.S. approach. Trading volume of 1,265,700 shares was more than 100% increase over the 579,168 average shares BTGC has been trading this month. So, that is another indicator that a BTGC price reversal has JUST BEGON! CCers should have covered this week and should be either averaging down by buying more shares or buying deep in the money long calls ($5.00s or $7.50s) if you need to make some repairs. BTGC has quickly tagged the upper BB since the bands are so narrow at this point. Meaning? I would venture to say BTGC will most likely gap upwards past the $8.00 on this next run. Especially, since the earnings release is no more than 8 days away. The serious money has been waiting for this solid price consolidation. There is much more upside potential. BTGC is still selling very cheap while everything else is starting to reach an overpriced P/Es. NASDAQ: (BTGC : $7 1/2) $359 million Market Cap at January 29, 1999 Trades at a 42% Discount PE Multiple of 21.2 X, vs. the 36.6 X average multiple at which the Drugs SubIndustry is priced. Drugs SubIndustry up .42% / Health Industry up .61% Today iqc.com S - Another Bargain at Basement Prices! Sears has been trimming the fat from credit card loses and sluggish sales. Sooner or later they should get their act together! Well, S may have finally bottomed out if you look at the charts. You just about have the last leg of a double-bottom pattern with a 64% discount on the P/E. Even this conservative dog is worth more considering S has a 12.66% growth rate and pays a nice dividend .43 cents per quarter or $1.72/share amounts to a 4.3% which is not to shabby nowadays! With CCing, collecting the div. and some capital appreciation I can't see why an investor would not earn 35% to 45% with S in 1999. NYSE: (S : $40 1/16) (SCC : $23.200) $15,753 million Market Cap at January 29, 1999 Ranks 15th in the Fortune 500 on Revenue & 62nd on Profit. Employs 335,000. Trades at a 64% Discount PE Multiple of 10.8 X, vs. the 29.9 X average multiple at which the Department Stores SubIndustry is priced. S - Example of Entry S stock is at $40 right. But, S also trades LEAPs and the 30 Jan01 @ 13 7/8s is a sale! Wow! You can buy two LEAPs for less than 100 shares of the S stock itself. $13.875 x 2 = $2,750 plus commissions. Your breakeven is $30 strike+13.875=$43.875. Now, you sit on the LEAPs until you get a upward price bounce and the price reaches the upper BB and the RSI is high. Straight WINs approach. Now, write a calendar spread using the LEAP for the stock. The CCs you would sell is anything at or above the 45 strike price. So, the 45 July Calls would yield more than $3 per call. Even at $3 that's a 21.6% return by July if not called out! If you are called out the rate of return is 29.7% ($45 strike - $43.875 = $1.125+$3.00 = $4.125/$13.875 = 29.7% net profit less commissions). Now, if you are not called out you get a chance to do it over again! That is, repeat the WINs approach and sell CCs. You would have to be a pretty bad investor not to be able to pull in 40% by December 1999. Another dog that turned into a gold mine was MOT when it was at $39 not too long ago. Those that followed my advice back then would be sitting pretty on an overvalued MOT at $72 right now! Wow! Love those dogs! GT is another DOW Dog that could do the same thing for you!