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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 (9971)	3/19/1999 4:59:00 PM
From: Herm	Respond to of 14162

WPI has a 23.43% growth rate and the last two quarters WPI has come in at expectations. NYSE: (WPI : $38 5/8) $3,396 million Market Cap at March 19, 1999 Trades at a 39% Discount PE Multiple of 22.1 X, vs. the 36.5 X average multiple at which the Drugs SubIndustry is priced. Today, WPI traded 2 million plus shares when 857,000 has been the norm for this stock. Surely, an oversold condition exist and a technical rebound (dead cat bounce) is due soon. Here are some technical clues. First, the ticks were positive despite the fact of a -1 1/2s (-3.5%) dump today. The price continues to drop as the up tick out number the down ticks. Looks like a shorting against the box trading pattern. That is, jerk the price up with small block chumming followed with big block shorting. What a racket! Here are the ticks: WPI Trading Summary 19-MAR-99 Ticks Money Flow($MM) Avg. Price Small Blocks +191 -188 +5.5 -7.5 38.8485 Large Blocks +12 -15 +8.2 -9.4 38.6270 Total: +203 -203 +13.8 -16.8 38.7120 18-MAR-99 Ticks Money Flow($MM) Avg. Price Small Blocks +145 -150 +4.9 -5.3 40.5701 Large Blocks +8 -12 +5.7 -7.9 40.5309 Total: +153 -162 +10.6 -13.2 40.5497 A look at the chart indicates a very low RSI and a continued downward sloping of the lower BB. When the price broke below $50-$52 it went into free fall as investors dumped WPI before they suffered losses. Hey, if WPI breaks and closes below $40 it will go down to $20. For now, the test is at $40.00. iqc.com There could be a little long call sideshow action at $40 strike for a quick rebound profit hit. WPI normally has a slow turnover Rate (TRO) of 116.76 Days. This selling volume is massive for this stock. New entry into this stock should hold off until a second bottom retest.