Biotech Wreck?

• November 28, 2000
• Dave Landry

Allergan
(
AGN |
Quote |
Chart |
News |
PowerRating),
in the strong drug sector
(
$DRG.X |
Quote |
Chart |
News |
PowerRating), may provide an opportunity for
covered calls. You can buy the stock for 91 1/2 and sell the January 100 calls for
4 3/8. This represents
approximately a 14% return (more than 90% annualized, based
on 56 days until expiration) should the stock be called away.

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Consumer non-durables
(
$CMR.X |
Quote |
Chart |
News |
PowerRating),
mentioned recently, rallied to close at a new closing high and looks
poised to break higher. Continue to look for buying
opportunities in calls
and call spreads here.

On the short side, biotech
(
$BTK.X |
Quote |
Chart |
News |
PowerRating)
appears to be stalling out in its retrace rally from lows. Look for buying opportunities in puts and
put spreads here. 

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Broker/dealer
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), mentioned
Monday night, still looks vulnerable. Continue to look for buying
opportunities in puts and put spreads here.

Looking Ahead

The gold and silver sector
(
$XAU.X |
Quote |
Chart |
News |
PowerRating) is
beginning to show signs of life.

Best of
luck with your trading on Wednesday!

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