Selling time in Time
As the current weekly trend analysis indicates, the overall trend picture remains overwhelmingly positive for all the major indices. However – with the exception so far of the Russell 2000 – the appearance of patches of red among the shorter-term trends indicates some near-term weakening.
This is consistent with the trend analysis for a variety of individual blue chip and technology stocks. It’s a mixed bag – especially in the former category.
Last week, despite limited access to the market for a couple of days due to travel, I did initiate two new August options positions. On Thursday I sold August 17 calls against my shares of Time Warner (TWX) as it rallied from its recent lows, lowering my net purchase cost to about 16.25. If the stock paid a dividend, I’d have been more inclined to sit back and see if it had further to go on the upside before pulling the trigger on the calls.
On Friday, I opportunistically sold some August 45 puts on International Rectifier (IRF) after it sold off heavily on a disappointing earnings announcement. Prior to this the stock’s performance had been strong, and the sell-off seemed to me to be overdone. I’m very familiar with this company and its industry and have no qualms about owning the shares if they’re put to me. No dividend though. 
Meanwhile I continue to watch for other put-selling opportunities. In the category of beaten-down “value” stocks I’m watching Citigroup (C), Fresh Del Monte (FDP), Sara Lee (SLE), and Tribune (TRB), among others.
Among stocks that have been strong recent performers, I’m especially watching American Home Mortgage (AHM), Amgen (AMGN), Chubb Corp. (CB), Fluor (FLR), GATX Corp. (GMT), Home Depot (HD), Kohl’s (KSS), National Semiconductor (NSM), Office Depot (ODP), Papa John’s (PZZA), Pharmaceutical Product Development (PPDI), St. Paul Travelers Companies (STA), Target (TGT), and Texas Instruments (TXN).
