August 16, 2009
Technical indicators remain bullish, but there is much bearish sentiment out there.
For investors, it may be a good idea to buy blue chips and hedge the position. Personally, I like to sell calls against my shares, and at this point in time, buying puts with the collected premiums. Look for the leap options, those with the most time left until expiration. Some of you may prefer to purchase bear market etf's, I like the leap puts.
For those of you expecting a sell off, use bear market etf's with caution. If the trade doesn't go your way, get out pretty close to where you got in. You can always take another shot at it from a higher price.
The stocks Im looking at right now are a handfull that held up well during the panic last fall. MCD, KO, PEP are my three favorites. Study the price charts and you will see what Im talking about. These also pay good dividends. The goal is to accumalate as many shares as you can, and grow your dividend check (they pay quarterly).
Normally when I sell calls I use the premium to add shares, as I do when dividends are paid.
For shorter term plays, I use stock picking software. The program scans the technical information that I normally look for, and saves me time. I then go through the picks generated and study the charts for entry and exit points. This software has helped me identify more opportunities with less time spent hunting for picks. It works great as long as you do your own due dilligence. You can learn more about this artificial intelligence, as well as get answers about trading and investing by e-mailing me at lmrtrader@gmail.com
Until next time, I wish you luck with your trading!
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