Quick Take: 21st Century Covered Call Strategy
Time Frame: One to Four Weeks.
Stock: Bullish Market Edge Opinion – Long Position.
Desired Stock Price Direction: Sideways to Up.
Option Position: Short ATM +1 Call – Long ATM +2 Call (Credit Spread).
Desired Result: Stock stays flat and the credit spread expires worthless or the stock performs as anticipated and the stock and the long call appreciate in line with the stock price.
Maximum Risk: The stock goes down in price but the loss is offset somewhat by the amount of the credit spread.
The following is a list of this week’s new selections. Each week, if conditions warrant, one or more stocks are added to the portfolio with the total never exceeding eight. These stocks have a Market Edge, Bullish technical Opinion. The stocks and option spreads are added to the portfolio based on Monday’s opening prices. The stocks are removed from the portfolio after four weeks or if the Market Edge Opinion is downgraded from Bullish. To access the free booklet that describes the 21st Century Covered Call strategy, click on the Get The Booklet tab located on the home page.
This Weeks 21st Century Covered Call Positions
New Selections: There are two new selections this week:
Market Edge Opinion: The technical condition of DE is improving as several of the pertinent indicators have turned positive and the stock appears to be under accumulation. The stock is underperforming the market over the last 50 trading days when compared to the S&P 500. The MACD-LT, is confirming that the intermediate-term trend is bullish at this time. A close above $145.63 is a number to watch to confirm a trend reversal. Momentum as measured by the 9-day RSI is positive but showing signs of slowing. Over the last 50 trading sessions, there has been more volume on up days than on down days indicating that DE is under accumulation, which is a bullish condition. The stock is trading above a rising 50-day moving average which confirms the improving technical condition. A move in price above the 200-day moving average will add to the improving technical condition of DE.
Market Edge Opinion:Though the technical outlook remains somewhat mixed there are signs that point to an improved outlook for the stock. Several of the pertinent indicators have turned positive and the stock appears to be under accumulation. Should the stock break above recent resistance numbers it could mark the beginning of a new uptrend. The stock is underperforming the market over the last 50 trading days when compared to the S&P 500. The MACD-LT, an intermediate-term trend indicator, is bullish at this time. A close above $154.80 is a number to watch to confirm a trend reversal. Momentum as measured by the 9-day RSI is positive but showing signs of slowing. Over the last 50 trading sessions, there has been more volume on up days than on down days indicating that URI is under accumulation, which is a bullish condition. The stock is trading above a rising 50-day moving average which confirms the improving technical condition. A move in price above the 200-day moving average will add to the improving technical condition of URI.
| The Market Edge – Market Posture: | Bullish | VIX: | 12.86 | Bearish | |||||
| # Of | Stock | S – Call | L – Call | Credit | Best | Week % | Approx. | Approx. | |
| Stock | Weeks | Price | Strike | Strike | Spread | Bet | Return | Div Date | Dividend |
| RCL | 4 | $121.35 | 122.0 | 123.0 | $0.36 | 6.0 | 0.3% | None | $0.00 |
| UTX | 4 | $131.05 | 131.0 | 132.0 | $0.38 | 7.0 | 0.3% | 08/16/18 | $0.70 |
| CELG | 3 | $92.54 | 92.5 | 93.5 | $0.42 | 7.0 | 0.5% | None | $0.00 |
| UPS | 2 | $123.92 | 124.0 | 125.0 | $0.41 | 4.0 | 0.3% | None | $0.00 |
| DE | 1 | $142.57 | 143.0 | 144.0 | $0.41 | 7.0 | 0.3% | 09/27/18 | $0.69 |
| URI | 1 | $156.75 | 157.5 | 160.0 | $0.81 | 10.0 | 0.5% | None | $0.00 |
| Prices Are Monday’s Opening Prices | |||||||||
| Stocks have strongest Market Edge Power Ratings | |||||||||
| Weekly % Return: The Higher The Better | |||||||||
| Best Bet: The Bigger The Better | |||||||||
| Commissions & Dividends Not Included | |||||||||
For reporting purposes, stock positions are closed after four weeks of play or if the Market Edge Opinion is downgraded from Bullish..
The 21st Century Covered Calls Model Portfolio – Track Record
| S&P: | 01/26/18 | 2872.87 | Dollar Profit/Loss = Stock Price Friday – Adjusted Stock Price + (Anchor | |||||||||
| S&P: | 09/01/18 | 2901.51 | Close Credit – Anchor Open Debit) When The Position Is Closed | |||||||||
| S&P Points Gain/Loss: | 28.64 | |||||||||||
| S&P % Gain/Loss: | 1.0% | Adjusted Stock Price = Open Stock Price – Total Spread Profit / Loss | ||||||||||
| Risk Capital: | $100,000 | Spread Losses Occur When The Stock’s Friday Close Is Below | ||||||||||
| Put Hedge Total P/L: | $877 | The Short Put Strike Price | ||||||||||
| Hedge Total % Return: | 0.9% | |||||||||||
| # Of Weeks: | 22 | Anchor Put – Debit/Credits Included In P/L Calculations Only When | ||||||||||
| Hedge To S&P P/L Ratio: | 0.9 | :1 | Positions Are Closed | |||||||||
| Win % – Adjusted Prices: | 50.0% | |||||||||||
| Transaction Costs & Dividends Not Included | ||||||||||||
| * After Symbol Denotes Short Stock Position | ||||||||||||
| Open | Open | Anchor | Anchor | Total | Adjust | Close | Stock | Anchor | Dollar | % | Anchor | |
| Date | Stock | Strike | Open | Spread | Stock | Date | Price | Close | Profit | Profit | Exp | |
| Stock | Monday | Price | Price | Debit | P/L | Price | Friday | Friday | Credit | Loss | Loss | Date |
| CELG | 01/29/18 | $105.23 | 105.0 | $5.50 | -$0.59 | $105.82 | 02/16/18 | $95.26 | $10.40 | -$5.66 | -5.4% | 04/20/18 |
| GILD | 01/29/18 | $87.82 | 87.5 | $4.50 | $0.43 | $87.39 | 04/06/18 | $73.41 | $14.27 | -$4.21 | -4.8% | 04/20/18 |
| SLB | 01/29/18 | $77.18 | 77.0 | $1.72 | -$2.19 | $79.37 | 02/16/18 | $66.28 | $10.20 | -$4.61 | -6.0% | 04/20/18 |
| EA | 01/29/18 | $116.12 | 115.0 | $4.60 | -$1.62 | $117.74 | 04/20/18 | $120.89 | $0.00 | -$1.45 | -1.2% | 04/20/18 |
| ADSK | 01/29/18 | $117.84 | 115.0 | $5.80 | -$2.59 | $120.43 | 05/11/18 | $136.21 | $0.00 | $9.98 | 8.5% | 04/20/18 |
| WDC | 01/29/18 | $89.33 | 90.0 | $5.50 | -$3.32 | $92.65 | 05/04/18 | $80.88 | $12.75 | -$4.52 | -5.1% | 05/25/18 |
| PEP | 02/05/18 | $118.24 | 120.0 | $4.35 | -$1.12 | $119.36 | 02/09/18 | $111.18 | $7.35 | -$5.18 | -4.4% | 04/20/18 |
| XOM | 02/05/18 | $82.98 | 82.5 | $2.75 | -$1.21 | $84.19 | 02/16/18 | $76.54 | $6.15 | -$4.25 | -5.1% | 04/20/18 |
| DECK | 02/12/18 | $93.90 | 92.5 | $5.15 | $2.11 | $91.79 | 04/20/18 | $89.00 | $3.50 | -$4.44 | -4.7% | 04/20/18 |
| NOW | 02/19/18 | $154.18 | 155.0 | $7.40 | -$0.55 | $154.73 | 05/18/18 | $173.94 | $0.00 | $11.81 | 7.7% | 04/20/18 |
| WDAY | 02/19/18 | $125.25 | 125.0 | $7.53 | -$1.81 | $127.06 | 05/04/18 | $130.05 | $0.00 | -$4.54 | -3.6% | 04/20/18 |
| JPM | 02/26/18 | $117.90 | 120.0 | $5.10 | -$3.54 | $121.44 | 03/23/18 | $107.01 | $13.60 | -$5.93 | -5.0% | 04/20/18 |
| SWKS | 03/05/18 | $109.14 | 110.0 | $6.70 | -$4.32 | $113.46 | 04/06/18 | $95.56 | $14.70 | -$9.90 | -9.1% | 05/18/18 |
| ATHN | 03/26/18 | $139.00 | 140.0 | $6.70 | $3.03 | $135.97 | 04/20/18 | $146.07 | $5.80 | $9.20 | 6.6% | 06/15/18 |
| AMT | 04/02/18 | $146.40 | 145.0 | $4.18 | -$2.44 | $148.84 | 04/13/18 | $138.90 | $7.30 | -$6.82 | -4.7% | 05/18/18 |
| TLT | 04/09/18 | $120.67 | 120.0 | $2.47 | $0.53 | $120.14 | 05/18/18 | $117.21 | $2.79 | -$2.61 | -2.2% | 05/18/18 |
| PG | 04/16/18 | $78.28 | 77.5 | $2.70 | -$1.17 | $79.45 | 05/04/18 | $72.43 | $5.75 | -$3.97 | -5.1% | 07/20/18 |
| Open | Open | Anchor | Anchor | Total | Adjust | Close | Stock | Anchor | Dollar | % | Anchor | |
| Date | Stock | Strike | Open | Spread | Stock | Date | Price | Close | Profit | Profit | Exp | |
| Stock | Monday | Price | Price | Debit | P/L | Price | Friday | Friday | Credit | Loss | Loss | Date |
| MSFT | 04/23/18 | $95.36 | 95.0 | $4.45 | $0.70 | $94.66 | 07/13/18 | $105.43 | $0.06 | $6.38 | 6.7% | 07/20/18 |
| CVX | 04/23/18 | $122.40 | 120.0 | $4.00 | -$0.45 | $122.85 | 07/13/18 | $124.04 | $0.19 | -$2.62 | -2.1% | 07/20/18 |
| MCD | 04/30/18 | $166.00 | 165.0 | $4.65 | -$3.35 | $169.35 | 06/29/18 | $156.69 | $8.40 | -$8.91 | -5.4% | 07/20/18 |
| XLE | 05/07/18 | $75.33 | 75.0 | $2.43 | $0.92 | $74.41 | 07/20/18 | $74.88 | $0.13 | -$1.84 | -2.4% | 07/20/18 |
| ALXN | 05/07/18 | $117.46 | 115.0 | $5.90 | $0.42 | $117.04 | 05/25/18 | $117.74 | $7.35 | $2.15 | 1.8% | 07/20/18 |
| LULU | 05/14/18 | $98.68 | 100.0 | $8.45 | $1.06 | $97.62 | 08/03/18 | $126.08 | $0.00 | $20.01 | 20.3% | 09/21/18 |
| HSY | 05/21/18 | $92.50 | 95.0 | $5.30 | $0.29 | $92.21 | 08/10/18 | $97.70 | $0.16 | $0.35 | 0.4% | 08/17/18 |
| PYPL | 05/21/18 | $81.35 | 82.5 | $4.85 | $2.67 | $78.68 | 08/10/18 | $87.01 | $0.10 | $3.58 | 4.4% | 08/17/18 |
| SWKS | 05/29/18 | $100.02 | 100.0 | $5.30 | -$0.11 | $100.13 | 07/27/18 | $95.20 | $5.50 | -$4.73 | -4.7% | 08/17/18 |
| UTX | 05/29/18 | $126.48 | 125.0 | $3.50 | $2.23 | $124.25 | 08/17/18 | $134.44 | $0.00 | $6.69 | 5.3% | 08/17/18 |
| PEP | 06/04/18 | $100.31 | 100.0 | $2.50 | $2.02 | $98.29 | 08/24/18 | $112.15 | $0.00 | $11.36 | 11.3% | 08/17/18 |
| V | 06/11/18 | $134.54 | 135.0 | $4.90 | $3.84 | $130.70 | 08/31/18 | $146.89 | $0.25 | $11.54 | 8.6% | 09/21/18 |
| LOW | 07/02/18 | $94.17 | 95.0 | $5.28 | $1.33 | $92.84 | 08/10/18 | $98.31 | $6.20 | $6.39 | 6.8% | 10/19/18 |
| EW | 07/09/18 | $146.47 | 145.0 | $8.60 | $1.36 | $145.11 | 08/24/18 | $141.73 | $8.40 | -$3.58 | -2.4% | 11/16/18 |
| DE | 07/16/18 | $135.89 | 135.0 | $5.75 | $1.22 | $134.67 | 08/03/18 | $143.36 | $0.00 | $2.94 | 2.2% | 09/21/18 |
| Open | Open | Anchor | Anchor | Total | Adjust | Close | Stock | Anchor | Dollar | % | Anchor | |
| Date | Stock | Strike | Open | Spread | Stock | Date | Price | Close | Profit | Profit | Exp | |
| Stock | Monday | Price | Price | Debit | P/L | Price | Friday | Friday | Credit | Loss | Loss | Date |
| PM | 07/23/18 | $83.44 | 82.5 | $3.75 | -$0.76 | $84.20 | 77.89 | $77.89 | -$10.06 | -12.1% | 10/18/18 | |
| WMT | 07/23/18 | $87.94 | 87.5 | $3.00 | $1.29 | $86.65 | 95.85 | $95.86 | $6.21 | 7.1% | 10/18/18 | |