Drugs Remain Defensive Play

• October 10, 2000
• Dave Landry

Perkin
Elmer
(
PKI |
Quote |
Chart |
News |
PowerRating) may  provide an opportunity for
covered calls. You can buy the stock for 99 3/8 and sell the November 110 calls
for 4 1/2. This represents
approximately a 15% return (more than 140% annualized, based
on 38 days until expiration) should the stock be called
away.

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Major
drugs
(
$DRG.X |
Quote |
Chart |
News |
PowerRating), mentioned recently, may still offer a defensive play.
Continue to look for buying opportunities in calls and call spreads here.

Insurance
(
$IUX.X |
Quote |
Chart |
News |
PowerRating), mentioned recently,
still remains relatively strong. Continue to look for
buying opportunities in calls and call spreads here.

On the
short side, telecom
(
$XTC.X |
Quote |
Chart |
News |
PowerRating) remains vulnerable. Continue to look for
buying opportunities in puts and put spreads here.

face=”Arial, Helvetica”>src=”https://tradingmarkets.com/media/images/Landry/xtc101000.gif” width=”470″ height=”320″>

Continuing on the short side, airlines
(
$XAL.X |
Quote |
Chart |
News |
PowerRating),
mentioned Friday night, still look vulnerable. Continue to look for buying opportunities in
puts and put spreads here.

Looking
Ahead

Broker/dealer
(
$XBD.X |
Quote |
Chart |
News |
PowerRating) and Banks
(
$BKX.X |
Quote |
Chart |
News |
PowerRating), remain weak
and may set up over the next few days.

Best
of luck with your trading on Wednesday!

P.S. Reminder:
Protective stops on every trade!