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Electronic Arts Inc. (ERTS) Message Board

  • ewanruprecht ewanruprecht Oct 19, 2005 1:45 PM Flag

    in a 5 yr. time period...

    ERTS has only twice diverged significantly from is SMA 63...

    all other times, after trading below its SMA 63, it has corrected back to that SMA within 1 month...

    1 time when it divereged "significantly" was in october of last year...it retraced within 2 months...

    the SMA 63 is at or around 55 right now...right on track with options...if history is any measure...ERTS will most likely retrace to the 55 level before the end of october or at the latest early november...

    if it is a sustained divergence, we could be looking at perhaps 2 to 3 months till correction with another few $'s to go on the way down...

    this would all point to 55 covered calls for a good bet to make the spread between cost and strike and the premium...right now the nov.'s are trading at 1.60 i think...

    if the correction is followed by a boost from 360, you could be looking to sell nov. 60 covereds...but i think that is quite speculative at this point...60 is probably not in the cards till after the 360 release...

    otherwise, looking at the options it looks like it will be stuck between 50 and 60 with a small bias to the upside

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