ChartWorksPUBLISHED BY INSTITUTIONAL ADVISORS WEDNESDAY, OCTOBER 22nd, 2008 Technical observations of RossClark@shaw.ca -Crude Oil Oversold- Covered Writing Opportunities Exist in Energy Stocks The seventy dollar decline in Crude oil prices has now triggered daily alerts in our Capitulation model. Previous examples of capitulation were Sept ’06, Nov ’02, Dec ’97, Dec ’93, Dec ’91, Apr ‘90 and Dec ’87. The most consistent action following the alerts was an upside bias in the XOI and TSX Energy indices in the ensuing two to three months. We would look to buy on any weakness. In today’s environment, with option premiums near all-time highs, covered writing strategies offer a means of capturing incremental income while owning an optionable stock. By purchasing an underlying stock and selling a call option an investor has the opportunity to participate in some of the upside action in the stock while taking in premium from the sale of the call option and gaining downside protection equal to the premium received. ![]() 2006 2002 ![]() ![]() 1998 1993 ![]() ![]() 1991 1990 ![]() ![]() 1987
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