Good Insurance

• October 11, 2000
• Dave Landry

Perkin
Elmer
(
PKI |
Quote |
Chart |
News |
PowerRating), mentioned Tuesday night, may still provide an opportunity for
covered calls. You can buy the stock for 99 5/8 and sell the November 110 calls
for 4 1/8. This represents
approximately a 15% return (more than 140% annualized, based
on 37 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 looks poised to rally out of a pullback. 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 have rolled over. Look for buying
opportunities in puts and put spreads on any continued weakness.

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Follow Up

As you know, telecom
(
$XTC.X |
Quote |
Chart |
News |
PowerRating),
mentioned recently as a short, got creamed on Wednesday. You might want to lock in
profits here as the sector is now very oversold. Ditto for airlines
(
$XAL.X |
Quote |
Chart |
News |
PowerRating).

Best
of luck with your trading on Thursday!

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