Back in the money
Following up the previous week’s positive action with another up week last week, the market is clearly back in positive territory – and that’s reflected in the current weekly trend analysis, which is now almost universally positive for all of the major indices. And, for the first time in quite a while, even many chronically under performing blue chip stocks – like DuPont (DD), JP Morgan (JPM) and Verizon (VZ) to name a few – are beginning to show signs of a positive trend change.
Coming into this week’s expiration, I only have two outstanding options positions: September 45 covered calls in Anheuser Busch (BUD), and September 27.5 short puts in Merck (MRK). I’ll probably let both positions ride into expiration. Right now it looks like there’s a good chance that my BUD shares may be called and that my short MRK puts will expire out of the money (although if I had to guess I’d say that on an intermediate-term basis MRK looks like it could see the 25-27 level again).
Last week I began placing limit orders in an attempt to sell October puts in Allstate (ALL), General Mills (GIS), Lear (LEA), and St. Paul Travelers (STA) as the underlying stocks declined toward target price levels. But so far none have triggered. I’ll continue to be watching these – and other previously mentioned stocks on my watchlist – for opportunities.
