The Low Cost Bullish (Long Stock) Put Hedge Strategy For The Week Of – 10-07-19

Quick Take: Low Cost Bullish Put Hedge Strategy

Time Frame: One to Twelve Weeks.

Stock: Bullish Market Edge Opinion – Long Stock Position.

Desired Stock Price Direction: Sideways to Up.

Option Position: Short ATM Put – Long ATM -1 Put (Bullish Put Credit Spread) and Long ATM Deferred Put.

Desired Result: Stock stays flat or moves up in price.

Maximum Risk: The stock declines in value. The loss is offset by the amount of the credit spread and the appreciation in the deferred anchor put.

Summary: If the stock stays flat or moves up, the credit spread will expire worthless and you will keep the credit. However, the deferred put will decline in value in line with the long stock position price rise. If the long stock position moves down, the loss will be offset by the amount of the credit spread and the appreciation in the deferred anchor put.

The following are this week’s Low Cost Put Hedge Selections. Each week, if conditions warrant one or more new stock positions are added to the Open Positions list. These stocks have a Bullish technical Opinion from Market Edge. The stocks and option spreads are added to the portfolio based on Monday’s opening prices. The stocks are removed from the portfolio after twelve weeks or if the Market Edge Opinion is downgraded from Bullish. To  access The Low Cost Put Hedge informative booklet click on the Get The Booklet tab located on the home page or at the bottom of this page.

This Week’s Low Cost Bullish (Long Stock) Put Selections

There is one new selections this week: JNJ

On 10/04/2019, The current technical condition for JNJ is strong and the underlying indicators should keep the current uptrend intact. The stock has outperformed 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. Upside momentum, as measured by the 9-day RSI indicator is very strong. Over the last 50 trading sessions, there has been more volume on up days than on down days indicating that JNJ 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 JNJ. The stock is below its 200-day moving average which is pointed up. A move above the 200-day will add credence to a bullish trend.

Current  Open Positions