21st Century Covered Call For The Week Of 12-23-19

Quick Take: 21^st Century Covered Call Strategy

Time Frame: One to Eight Weeks.

Stock: Bullish Market Edge Opinion – Long Stock position.

Desired Stock Price Direction: Sideways to Up.

Option Position: Short ATM Call – Long ATM +2 Call (Credit Spread).

Maximum Risk: The stock goes down and you lose the amount of the stock’s decline. However, the loss is offset somewhat by the amount of the credit spread.

Summary: If the stock stays flat or moves down, the credit spread will expire worthless and you will keep the credit. If the stock moves up, the stock and the long call will appreciate in line with the stock price.

This Week’s 21st Century Covered Call Selections

There is one no new selections this week:  PM

On 12/20/2019, The current technical condition for PM is strong and the underlying indicators should keep the current uptrend intact. Over the last 50 trading days, when compared to the S&P 500, the stock has performed in line with the market. The MACD-LT is confirming that the intermediate-term trend is bullish. Upside momentum, as measured by the 9-day RSI indicator is positive but is beginning to slow. Over the last 50 trading sessions, there has been more volume on up days than on down days indicating that PM is under accumulation, which is a bullish condition. The stock is trading above a rising 50-day moving average. This validates the strong technical condition for PM. The stock is above its 200-day moving average but the 200-day is pointed down indicating that the intermediate-term trend is still in question.