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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: Jan Ravi who wrote (9895)	3/8/1999 8:39:00 AM
From: Herm	Read Replies (4) \| Respond to of 14162

Very good Jan! CD has a slowing 17.54% growth rate an a P/E of 20.4. Earnings has been slipping lately and the stock was beaten up. Narrowing of the BB and such a low RSI which is climbing while the stock price is level sure does hint a pending upward price gap. A move from $8.00 to $10.00 (25%) overhead price resistance is not out of the question at this point for CS. I really like the CS LEAPs for this stock. With a upward price move pending a WINs approach might go as follows: Buy 5 to 10 CS 10 JAN01 LEAP @3 and wait for a price raise of say $9.00 before writing the spread selling (CCing) 10 JUL CALLs @ 1 3/8+. At 1 3/8s estimated value would generate a 46% rate of return against the LEAP surrogate (cost $3) you used for the call ($1 3/8). Another $2.00 (25%) on the stock if the CC is exercised and you are called out. A cool 71% in 5 months time! Hummmm? I may just sell some BTGC CCs to raise the money to do this CS play. Looks interesting! NYSE: (CS : $7 15/16) $1,252 million Market Cap at March 5, 1999 Ranks 876th in the Fortune 1,000 on Revenue & 432nd on Profit. Employs 5,375. Trades at a 60% Discount PE Multiple of 20.4 X, vs. the 51.0 X average multiple at which the Networking SubIndustry is priced. iqc.com