The Option Investor Newsletter Wednesday 4-5-2000 Copyright 2000, All rights reserved. Redistribution in any form strictly prohibited. Posted online for subscribers at http://www.OptionInvestor.com Also provided as a service to The Online Investor Advantage ****************************************************************** MARKET WRAP (view in courier font for table alignment) ****************************************************************** 4-05-2000 High Low Volume Advance Decline DOW 11033.90 - 130.90 11218.20 11002.60 1,120,836k 1,658 1,305 Nasdaq 4,169.22 + 20.33 4286.88 4009.09 1,878,160k 2,269 1,973 S&P-100 806.29 - 9.33 817.63 801.18 Totals 3,927 4,583 S&P-500 1487.37 - 11.24 1506.55 1478.05 46.1% 53.9% $RUT 518.04 + 11.92 526.13 494.03 $TRAN 2824.28 + 99.33 2835.95 2720.76 VIX 30.59 + 2.69 65.45 29.11 Put/Call Ratio .55 ****************************************************************** NASDAQ +20, What A Rebound! The markets were poised for a bounce, right? Well, they gave it a shot despite a gap down opening that saw the Nasdaq give up another +100 points. That was short-lived though and buyers quickly emerged, pushing the Nasdaq to an intraday high of 4286 before the slow retracement began around 3pm EST. It bled off most of the gains before jumping back to positive territory in the final few minutes. But it was nothing to write home about, that is for sure. But many traders were relieved to see at least a calming to the volatility that rocked Wall Street yesterday. The intraday swing for the Nasdaq was ONLY 277 points. A week ago we would have considered that violent. So chalk up a minimal gain for the Nasdaq, but don't rest too easy because the legs behind this rally were noticeably shaky. The DJIA and S&P 500 were no help either as both markets decided to give up more ground. Don't look now, but the DJIA closed back below 11,100 and was seriously making a case for below 11,000 close. When the dust cleared, the DJIA posted a close of 11033.92, down 130.92. The S&P finished down 6.93 to 1487.80 and below the key 1500 level. That level acted as resistance all day too. Volume was steady on the DJIA with over 1.1 billion, while the Nasdaq turned in 1.9 billion. The technical picture doesn't look great for either market. You can see on the DJIA chart the big drop and subsequent recovery, but is this another rollover we are seeing? The only hope is that the Industrials have been stuck in this congestion around 11,000 for so long that it may continue to hold on. The Nasdaq chart is longer-term to show that today may be the top of the range in this recent trend. You have to wonder with the kind of damage that was done on Tuesday if this market can really come back right away. Today's selloff came in the face of some key figures trying to calm the markets to some degree. Abby Joseph Cohen, chief investment strategist at Goldman Sachs and the one who many peg as the catalyst for the recent decline, came out more up beat today at a conference at the White House. She said that she is still optimistic for stock prices this year. "For the past decade, we have been enthusiastic about the outlook for U.S. stock prices in the United States, and we remain so." were her exact words. Alan Greenspan also spoke today in Washington and also had a similar calming tone to his speak. Although he did little to tip his hand to the future direction of interest rates. He gave credit to the "extraordinary surge in technological innovation" for America's current record- breaking economy. Strength could be found in certain sectors with Airlines, Biotechs, Semiconductors and Utilities moving higher. On the downside were Oil, Drugs, Retail and Telecom. There were a lot of stocks posting big intraday gains too before selling off near the close. AFFX was +28 before closing +22, VIGN was +31 before ending +15, INKT was +16 before closing up +2 and VRSN was up +20 before ending up only +10. That sums up the Nasdaq action pretty well. Stocks tried to rebound, but were met with heavy selling in the final hour. By the looks of things today, enthusiasm for YHOO's earnings seemed non-existent. The typical pre-earnings run-up in YHOO didn't happen as YHOO had trouble holding $165. After the close, YHOO reported 1st quarter earnings of $0.10 per diluted share, beating the Street consensus of $0.09 and meeting the whisper number. At first, YHOO shot up to $171 in after-hours trading, only to sell-off in typical fashion. It traded as low as $158. Independent of the stock move, YHOO's numbers looked good. Their revenues were up 13% from last quarter. Evidence of their global expansion is that 14% of revenues were international. Also, page views per day reached 625 mln in March versus only 465 mln in December. The Biotechs finally got some relief today after having a rocky ride throughout March. They have been on an accelerated slide ever since President Clinton and Prime Minister Tony Blair declared that advances in human genome research should be made publicly available. Today, at a White House press conference on the New Economy, President Clinton joked that he did not mean to move the markets in mid-March with his comments pointed at gene research. He said researchers who discover commercial applications for genetic information should have the right to patent their discoveries. However, Clinton added that genetic information that is discovered as part of the Human Genome Project should be made public. The Biotech Index($BTK) rose 26.50 points to 500, a 5.6% advance. Leading the sector was INCY, up 18%, HGSI and CYTO surged 19%, and BGEN edged up 10%. In a victory for the "old economy" stocks, Sears Roebuck(S) preannounced today that it expects first quarter earnings to come in between $0.62 and $0.67 per share. Quite an impressive gain compared with last year's first quarter earnings of only $0.38 per share. These current figures will be record earnings for the "old economy" behemoth. Both their domestic store sales and revenues surged in the first three months of 2000. Contributing to the bottomline for Sears was strong retail demand, continuing strength in its credit service business, and their stock buy back program resulting in fewer outstanding shares. This positive news should carry on throughout the year as Sears expects a full-year earnings per share growth rate between 13% and 17%, higher than previous estimates of 11%. Sears rose sharply on the news, closing up $7 at $37.50. The bottom line? They sold an extra washer and few more shirts than expected. The trick here is to try and figure how traders will react to the employment report due out Friday morning. Does anyone care what the numbers are as long as they aren't really out of line? It seems to me that traders are busy trying to determine market sentiment and how quickly institutions will return to the previously coveted tech stocks. A relief rally for the Nasdaq is in order, but I am afraid we may have seen it today. YHOO posting an average earnings number after the close didn't help any. If the selling in the Internets that we typically see post-Yahoo earnings begins tomorrow, it could quickly get out of hand again. It is hard to make the case that valuations are now in line and don't deserve another sell-off when you still have high relative prices vs. even a year ago. So the employment report could be on the back burner tomorrow. With that said, the volatility did decrease today and volume wasn't beserk with individuals selling. If the market can stabilize and investors slowly get the nerve to begin placing some more bids, we may have seen the worst. A little more consolidation may be just what the doctor ordered before seeing the Nasdaq return to higher levels. Remember, the Nasdaq was at 4600 just last Thursday. Although a sustained rally may be too much to ask for. A continuation of the recovery to the 4450 level is what some traders are looking for. That was the level that provided good support in March and will now turn into resistance. Due to the recent volatility, I have been keeping my trades to the intraday kind, not feeling brave enough to hold overnight. The wild swings have actually made for some good trading conditions too, when my broker can get a fast execution, that is. I look to do more of the same; quick, fast trades headed where ever the trend is going that hour. Look for more of the same and...when in doubt, get out. Save yourself from the headache of trying to implement a disaster recovery strategy on something you should have bailed out of sooner. Ryan Nelson Asst. Editor *************************Advertisement**************************** Options Traders ! Mr. Stock's new online trading site has been designed for you. Trade spreads, straddles, covered writes, and stocks online. Get real-time market data throughout our site. Advanced options tools include volatility graphs, implied volatilities, and more. http://mojofarm.mediaplex.com/adserver/click_thru_request/565-58-1875-3 ****************************************************************** *********** STOCK NEWS *********** A Little Stability for a Volatile Market By S.P. Brown After two days of margin calls and massive losses, many investors have had their ardor for risk cool faster than Rick Rockwell and Darva Conger's romance. It's understandable. After two years of soaring equity prices, it's easy to be duped into believing that stocks prices only go one way, and that's up. However, over the past two weeks, the reality that risk is indeed a double-edged sword has been driven home with all the subtlety of a punch to the nose. The fact is, a $100 stock can just as easily go to $50 as it can go to $150, and when that stock does go to $50, the pain is often more excruciating than many investors imagine. So, for those folks who have been burned badly over the last few weeks, or who just want to let the Nasdaq Composite Index (COMPX) test 3,600 a few times before you getting back in the game, here's a nice little stock to consider tying you over in the meantime. Be forewarned, though, this stock is boring, it's not tech and it's trading at it's 52-week low. It's Ennis Business Forms (EBF). Yes, Ennis' business is as pedestrian as its name sounds (there's no covert B2B e-commerce strategy lurking in the background). The company is a leading producer of business forms. Approximately 95 percent of Ennis' products are custom and semi-custom constructed in a wide variety of sizes, colors, number of parts and quantities on an individual job basis depending upon the customer specifications. Some of the company's traditional offerings include stock and custom business forms and blank checks, as well as non- traditional offerings such as commercial printing, promotional products, awards and ribbons, office supplies, tags, labels and presentation products (try to keep those eyelids open). Ennis operates 16 manufacturing locations in 11 states, which provides its 46,000 dealers a national network for meeting customer demands. The company's major customers include advertising specialty dealers, printing brokers, direct manufacturers, wholesale/catalogers, commercial printers and franchise organizations. Though not a fast grower, sales have crawled along at a 2 percent annual rate over the past four years, there is still a lot to like about Ennis. For one, it's got a balance sheet to die for. The company has no long-term debt (remember those nasty interest rate increases?) and a current ratio of 4.15. Additionally, it sports a price-to-sales (P/S) ratio of 0.73, a price-to-earnings (P/E) ratio of 9.74 and a price-to-book (P/B) ratio of 1.32. On top of a clean balance and Ben Graham-like valuation ratios, Ennis consistency provides high returns on equity (over the past five years, it's averaged a ROE of 21 percent) and strong cash flows with little risk. For the nine months ended November 1999, which was the end of the last reporting period, sales at Ennis rose 6 percent to $119 million, while net income advanced 13 percent to $11.1 million. The higher than average growth reflects an increase in the business forms segment and lower raw materials costs and efficiency improvements. Obviously, Ennis is no Cisco Systems (CSCO). However, there is a good probability that Ennis' snail-like revenue growth will pick up some steam over the next 12 to 18 months, for the company has gone on a minor acquisition binge over the past few months. In November 1999, Ennis acquired Adams McClure Inc., a point of purchase display enterprise located in Denver for $16.7 million. Adams had $30 million in revenue for 1999. Following that little coupe, Ennis purchased American Forms Inc., a San Antonio-based manufacturer of business forms for $2.1 million. American should add at least $4.5 million to the top line. But that's not the end of the story. In January 2000, Ennis signed a letter of intent to form a strategic alliance with Safeguard Business Systems. The agreement will allow the company to promote its traditional forms products to Safeguard's large national distributor network. Admittedly, despite these acquisitions, Ennis is probably going nowhere fast. The company has no major institutional followers (you'll be lucky if you get ten messages on its Yahoo message board a month). What's more, it's 52-week price range is only $6.81 to $9.75 (it currently trades at $7.38). Nevertheless, for investors ready for a breather, Ennis provides an annual dividend of $0.62 per share that's easily covered by its $1.19 in annual cash flow (that's a 8.40 percent yield). But here's the most intriguing feature of Ennis that many investors overlook when constructing a diversified portfolio, it's not positively correlated with the stock market. Ennis is one of those rare companies that sports a negative beta, which is -.15. This means that historically Ennis has, on average, moved down $0.15 for every point the market has moved up. However, on the flip side, Ennis has moved up $0.15 for every point the market has moved down. This is a nifty little characteristic to have for investors interested in reducing the volatility in their portfolios, and it's one many investors neglect. Therefore, Ennis can be more than just a temporary store of cash, it can make an excellent addition to a well-diversified portfolio. Admittedly, Ennis isn't going to shake-up the world. In fact, the business forms industry is probably as mature as a thriving industry can be. However, Ennis has prospered by catering to smaller customers more likely to do business the old fashioned way - on paper (and there are a lot of those businesses out there), which proves it's still possible to make money by just doing the simple things well. *************** PLAY OF THE DAY *************** PUT *** IIJI - $64.38 +8.88 (-5.38) IIJI offers a range of Internet access and Internet-related services primarily to large corporations and other ISPs in Japan. The company has one of the largest Internet backbone networks (A-Bone) which connect eight Asia/Pacific countries and also leases networks that connect Japan and the US. Most Recent Write-Up Yes indeed! Things got even uglier for IIJI the past two days. IIJI ran through the first line of defense at $67.13 (Friday's daily low) and then tackled support at $65 with ease by mid-afternoon in Monday's session. The momentum kept on rolling and IIJI dived to $50. This big upset in the share price was much quicker than anticipated, but certainly welcome! The upward bounce off this bottom support level is not too unusual, especially when you consider investors haven't seen the stock dip to these levels for many moons. So while the downward trend is intact and the momentum quite forceful, be alert for further signs of a rebound. Some investors may see the 32.3%, or $26.50 drop of late just too good of a deal to pass up! Although from a technical perspective the MACD, Momentum, and Stochastic indicators are still pointing south suggesting further declines. Comments Although IIJI had a relatively strong day from the NASDAQ relief rally, it couldn't break through its 10-dma at $72. IIJI grew weak at the end of the day, giving up almost $8 in the final hour of trading. We feel that this weakness may continue tomorrow and that any retest of the NASDAQ's recent lows certainly will weigh heavily on IIJI. Use caution when entering this put play and watch for NASDAQ movement and direction as a cue. BUY PUT APR-75 IUJ-PO OI=44 at $12.75 SL=10.25 BUY PUT APR-70 IUJ-PN OI= 0 at $ 9.00 SL= 6.75 Wait for OI! BUY PUT APR-65*IUJ-PM OI=13 at $ 6.00 SL= 4.25 Average Daily Volume = 387 K /charts/charts.asp?symbol=IIJI ************************************* BIG COVERED CALLS & NAKED PUT SECTION ************************************* Looking For the Bottom... Unfortunately, we have no evidence the recent technology sell-off has come to an end. This week's activity appears to be the final stages of a complete restructuring of the technology market. An unprecedented change of attitude regarding earnings is occurring and only the leading companies will survive. With that outlook in mind, we are going to list a small group of issues that can be considered investment quality portfolio holdings; companies that offer excellent future potential regardless of the short-term market condition. Summary of Previous Picks: Covered Calls: (Margin would double the listed Monthly Return) Stock Strike Strike Cost Current Profit Monthly Symbol Month Price Basis Price (Loss) Return AFCI APR 55 49.75 58.00 $5.25 7.3% PCLE APR 25 23.47 29.69 $1.54 6.7% Split 2 -1 ASYT APR 40 37.18 53.25 $2.82 6.2% SPYG APR 55 52.37 54.50 $2.13 5.4% Near 150dma NXTV APR 125 117.71 128.13 $7.29 5.1% Wow!?! CY APR 45 42.93 46.06 $2.07 4.9% Still Above 50dma YHOO APR 175 165.07 169.88 $4.82 3.0% Earnings Ouch? DITC APR 90 83.38 86.50 $3.13 2.6% Key Moment ZIXI APR 65 62.50 62.00 -$0.50 0.0% Watch Closely ISSX APR 105 96.19 95.00 -$1.18 0.0% Hopeful MANU APR 45 42.50 40.38 -$2.12 0.0% Watch Closely PHCM APR 120 114.51 112.19 -$2.31 0.0% No Lower PHTN APR 70 66.50 56.75 -$9.75 0.0% No Lower PUMA APR 67 62.88 43.75 -$19.12 0.0% No Lower TGNT APR 80 75.25 54.63 -$20.62 0.0% Closing Closed: New Era Of Networks (NEON) - Closed well below 150 dma Naked Puts: Stock Strike Strike Cost Current Profit Monthly Symbol Month Price Basis Price (Loss) Return ASYT APR 35 33.38 53.25 $1.63 11.5% AFCI APR 45 42.63 58.00 $2.38 10.1% NXTV APR 115 110.63 128.13 $4.38 9.9% YHOO APR 155 150.75 169.88 $4.25 9.9% ISSX APR 90 86.38 95.00 $3.63 9.0% MU APR 85 82.25 131.00 $2.75 8.9% CY APR 40 39.00 46.06 $1.00 8.7% INKT APR 140 136.00 160.38 $4.00 7.6% PCLE APR 22 22.03 29.69 $0.47 7.6% Split 2 -1 PHCM APR 105 102.56 112.19 $2.44 7.6% Watch Closely SPYG APR 45 44.12 54.50 $0.88 7.5% Near 150dma IMNX APR 51 49.83 62.56 $1.83 7.4% Split 3 - 1 KSU APR 75 73.87 78.00 $1.13 7.0% Bouncing! NT APR 115 112.62 117.13 $2.38 6.5% Next support - 105 SFE APR 60 58.00 60.50 $1.42 6.3% Split 3 - 1 MANU APR 35 34.44 40.38 $0.56 6.0% Watch Closely AFCI APR 45 43.81 58.00 $1.19 5.9% Bouncing! QCOM APR 130 128.37 141.25 $1.63 5.8% Still Lateral ZIXI APR 55 54.19 62.00 $0.81 5.7% Watch Closely PHTN APR 65 63.94 56.75 -$7.19 0.0% No Lower MFNX APR 75 73.56 66.25 -$7.31 0.0% Watch Closely IBIS APR 85 83.25 70.00 -$13.25 0.0% No Lower TGNT APR 70 67.94 54.63 -$13.31 0.0% Closing PUMA APR 60 57.82 43.75 -$14.06 0.0% No Lower Closed: New Era Of Networks (NEON) - Closed well below 150 dma NEW PICKS We list favorable "in-the-money" covered write and "out-of-the- money" naked put candidates that offer conservative entry points into technically bullish charts, with reasonable monthly returns. The positions that we find favorable (and will track every week) will be marked by asterisks. Do not enter these trades unless you fully understand the strategy and various methods of manipulating the position should the stock price drop, or rise, and in the event you decide you want to keep the issue. **** AMAT - Applied Materials $104.19 *** On The Move Again! *** Applied Materials is the world's largest semiconductor equipment company. AMAT develops, manufactures, markets and services semiconductor wafer fabrication equipment and related spare parts for the worldwide semiconductor industry. Customers for these products include semiconductor wafer manufacturers and semiconductor integrated circuit (IC or chip) manufacturers that either use the ICs they manufacture in their own products or sell them to other companies. These ICs are the key components in most advanced electronic products such as computers, telecommunications devices, automotive engine management systems and electronic games. Applied Materials moved higher today on volume of more than 21 million shares - three times the stock's average daily volume. Analysts at Adams, Harkness & Hill raised the manufacturer of computer chip-making equipment to "accumulate" from "market perform." Technically this issue has performed very well given the broader markets' weakness in recent weeks. Looking forward, AMAT will likely continue higher as momentum traders move back into this market favorite. Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Call APR 95 ANC DS 3949 12.25 91.94 6.3% *** Sell Put APR 85 ANC PQ 3396 1.56 83.44 12.3% *** Sell Put APR 87.5 ANC PY 1232 1.88 85.62 13.3% Sell Put APR 90 ANC PR 4777 2.38 87.62 15.1% Sell Put APR 92.5 ANC PZ 2006 3.13 89.37 18.0% Sell Put APR 95 ANC PS 2673 3.88 91.12 20.3% Chart = /charts/charts.asp?symbol=AMAT **** AMD - Advanced Micro Devices $68.38 *** Entry Point! *** Advanced Micro Devices is a worldwide semiconductor manufacturer. Their products include a wide variety of industry-standard integrated circuits used in product applications such as telecommunications equipment, data and network communications equipment, consumer electronics, personal computers and workstations. AMD also produces flash memory chips, which retain data stored in them after the power is cut off. Flash memory is widely used in hand-held devices such as the Palm Inc. electronic organizer and mobile phones. AMD has benefited from increased demand for flash memory and will continue to be one of the leaders in this growing industry. Semiconductor stocks posted significant gains today with Micron Technology (MU) leading the group higher. Advanced Micro Devices also enjoyed a significant rally. AMD rose almost $7 after the company said that it expects first quarter sales to surpass $1 billion. The new all-time high suggests the trend is intact and should continue. We simply favor the conservative cost basis for the bullish issue. Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Call MAY 60 AMD EL 1698 13.13 55.25 5.9% *** Sell Put APR 50 AMD PJ 2104 0.44 49.56 5.9% *** Sell Put APR 55 AMD PK 2584 1.06 53.94 13.4% Sell Put APR 60 AMD PL 1057 2.13 57.87 19.2% Chart = /charts/charts.asp?symbol=AMD **** CSCO - Cisco $72.13 *** A Core Portfolio Issue! *** Cisco Systems provides networking for the Internet. Cisco creates hardware and software solutions that link computer networks so as to facilitate easy access to information regardless of differences in time, place or type of computer system. Their product portfolio offers end-to-end networking products and services. Their wide range of products enable them to configure hardware and software features to meet customer requirements. They are now also delivering video and voice capabilities in its products, allowing customers to transition their data networks to a single multiservice data, voice and video network. Cisco is one of the all-time, leading technology companies and should certainly be a core holding of any long-term portfolio. Their bullish performance over the past 5 years is incredible and the company's dominant industry position along with a solid fundamental outlook suggests the trend will continue. Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Call MAY 67.5 CWY EU 1321 9.25 62.88 5.1% *** Sell Put APR 60 CWY PL 16684 0.56 59.44 6.2% *** Sell Put APR 62.5 CWY PZ 12198 0.81 61.69 7.7% Sell Put APR 65 CWY PM 15536 1.50 63.50 12.3% Chart = /charts/charts.asp?symbol=CSCO **** IBM - International Business Machines $125.00 *** Big Blue! *** International Business Machines provides customer solutions through the use of advanced information technology. Their major operations are conducted through several operating segments. The Personal Systems segment produces general-purpose computer systems, including some software. The Server segment produces multi-purpose computer systems that operate many open network based applications. The Global Services segment is a versatile information technology services provider, supporting computer hardware and software products. Other segments cover operations in financing, software, and enterprise investments Everybody knows IBM and because of its long-term stability, the issue has received new investor attention in recent weeks. The company has been working diligently to expand its profit base and today engineering and technology group ABB announced that it has signed a $250 million global information technology agreement with IBM to cover its equipment needs. Swiss-Swedish ABB will lease about 75,000 desktop computers, 25,000 laptop computers and 9,000 servers from IBM, and will order them directly through a Web-based procurement system. That's one giant order and it will certainly help IBM's future revenues. Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Put APR 110 IBM PB 15035 1.56 108.44 8.1% *** Sell Put APR 115 IBM PC 11002 2.50 112.50 11.2% Chart = /charts/charts.asp?symbol=IBM **** IMNX - Immunex $62.56 *** Own This One! *** Immunex is a biopharmaceutical company that discovers, develops, manufactures and markets innovative therapeutic products for the treatment of human diseases including cancer, infectious diseases and immunological disorders. Their major product lines includes drugs that are effective in treating arthritis, pain in cancer patients, and in stimulating infection-fighting white blood cells. Immunex is currently developing new products to address ailments such as inflammatory disease, infection, multiple sclerosis, asthma and cancer. Immunex is one of the better-known drug and biotechnology giants and its long-term performance is almost unchallenged in the industry. The classic post split sell-off did not occur and now the issue appears ready to resume its up-trend. Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Call MAY 50 QUV EJ 45 16.00 46.56 5.1% *** Sell Put APR 45 IUU PI 442 0.56 44.44 8.2% *** Sell Put APR 50 QUV PJ 2861 1.13 48.87 15.7% Chart = /charts/charts.asp?symbol=IMNX **** MNMD - Minimed $132.50 *** A Favorable Cost Basis! *** MiniMed designs, develops, manufactures and markets advanced microinfusion systems for delivery of a variety of drugs primarily focusing on diabetes management. They have historically sold external insulin pumps and related disposables, which are designed to deliver small quantities of insulin in a controlled, programmable profile. The programmable external insulin pumps are thin and lightweight (about the size of a pager) and designed to be worn under the patient's clothing in order not to interfere with normal daily activities. They also have developed an implantable pump, which has so far been solely utilized for insulin delivery. MiniMed plans to diversify its drug delivery programs, to expand the market for insulin pumps, and to diversify into disease management and the distribution of additional diabetes products. MiniMed is planning improvements to its current insulin pump related products. Minimed is one of several pharmaceutical and biotech stocks that have performed well amid the technology sell-off. Stocks in these industry groups have been hammered in recent weeks and today's recovery may reflect a rotation back into the sector. The new all-time high for the issue is one such indication as leading companies are generally the first to benefit from any new inflow of capital to a particular industry group. Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Put APR 100 MAQ PT 46 0.75 99.25 5.2% *** Sell Put APR 105 MAQ PA 5 1.31 103.69 9.0% Chart = /charts/charts.asp?symbol=MNMD **** SUN - Sun Microsystems $88.75 *** Entry Point! *** Sun Microsystems is a worldwide provider of products, services and support solutions for building and maintaining network computing environments. Sun sells scaleable computer systems, high-speed microprocessors and high performance software for operating network computing equipment and storage products. They also provide support, education and professional services. The company's products are used for many demanding commercial and technical applications in various industries including telecom, manufacturing, financial services, education, retail, government, energy and healthcare. Sun Microsystems is still a market (and OIN) favorite and even with this week's sell-off, the recent technical consolidation pattern appears to be intact. The price history exhibits a relatively solid base of support near $80 and that will be our target entry area for the position. Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Call APR 80 SUX DP 6113 11.75 77.00 7.4% *** Sell Put APR 70 SUX PN 3637 1.06 68.94 10.7% *** Sell Put APR 72.5 SUX PV 3440 1.44 71.06 13.2% Sell Put APR 75 SUX PO 3541 1.81 73.19 14.6% Sell Put APR 77.5 SUX PW 1618 2.44 75.06 17.4% Sell Put APR 80 SUX PP 5412 3.25 76.75 20.6% Chart = /charts/charts.asp?symbol=SUNW ************************Advertisement************************* Tired of waiting on trades to execute? Does your broker offer Stop Losses on Options? Trade instantly with Stop Losses at Preferred Capital Markets Stop Losses based on the option price or the stock price. 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