Accentuating the positive
The strength this week in the market was enough to reverse – for the most part – the deteriorating trend picture that had been developing recently. According to the weekly trend analysis of the major indices, all of the indices – with the exception of the ever-lagging Dow Jones Industrials – are now displaying a mixed, but decidedly positive, overall status.
This past week I took some action and bought back my short August 80 puts in Schlumberger (SLB) as the stock rallied with the rest of the oil sector on worsening news in the aftermath of hurricane Katrina. The result: a net return of 1.5% in the two weeks since I sold the puts on August 17.
In the meantime, I’m continuing to watch for put selling opportunities in selective stocks. One recent strong performer that I’ve added to my active watchlist is Procter & Gamble (PG). Among stocks that have been selling off, General Mills (GIS), Lear Corp. (LEA ), Target Corp. (TGT), and Universal Health Services (UHS) will definitely attract my interest on further declines.
What about Katrina’s influence in New Orelans? Won’t it be a grwoth break for at least half a year?