Semis improve while market churns
Following last week’s mostly sideways action in the market, the weekly trend picture of the major indices remains almost completely positive. Two additional positive changes to note: semiconductor shares, as represented by the Semiconductors Holders Trust (SMH), have improved from a strongly negative to a mixed trend picture; and continued strength in the Russell 2000 has negated (for now) a negative divergence in its price oscillator indicators.
New positions
All of the stocks that were put to me during this last options expiration – Lear (LEA), Sanderson Farms (SAFM), and General Maritime (GMR) – proved very cooperative last week by rallying nicely. Since they all still appear to be in intermediate-term downtrends, I didn’t waste any time in selling April calls against them as they rallied: I sold 17.5-strike calls against LEA, 35-strike calls against GMR, and 22.5-strike calls against SAFM.
I also initiated some new short put positions (all Aprils) in several stocks mentioned in last week’s watchlists. I sold some 45-strike puts on Abbott Labs (ABT), some 55-strike puts on Glaxo SmithKline (GSK), and some 45-strike puts on Progress Energy (PGN).
Watchlist
New additions this week to the “upside strength” watchlist include Bristol-Myers Squibb (BMY), Harrah’s Entertainment (HET), Ingersoll Rand (IR), and KeyCorp (KEY). A new addition to the ‘beaten down” list is an electric utility: Ameren (AEE).
