A covered call stock needs to meet these criteria:
- Slightly bullish to neutral prospects. I.e., I don't want the shares to come crashing down, but I also don't want them to have huge rise.
- Price sufficiently low so that I can afford 100 shares. Calls come in 100-share units, so there's no way to sell a call against fewer than 100 shares.
- Volume sufficient to provide liquidity. Basically, the higher the better, but not below 1 million shares.
USO is showing a bull signal on a 2.6 percent rise followed by a partial pullback. The trend has been sideways since June. Otherwise, no new indicator signals.
No new signals from the currency pairs or my holdings.
High-volume stocks and etfs priced at 20 or greater:
- CVS, bear signal, sideways trend since a huge gap down in November
- KR, bull, sideways since a huge gap down on Dec. 8
- BRCM, bull on a 4% rise, up since November
- EBAY, bull, down since September
- CIT, bear, unknown trend after five trading days since shares resumed trading
- ESRX, bear on a 4.7% fall, up since March; shares are trading where they were on Nov. 30, so it's not as apocalypic as it might sound.
- MHS, bear on 4.6% fall, up since March
- BBD, bear, up since March
- BA, bear, up since March (with some fairly deep pullbacks)
The bear signals on those two issues are counter-trend, but I shall look hard at them at the next bull signal.
BRCM's with-the-trend bull signal pushes prices to upside resistance, the second test of those levels in the past four days. A possible trade if it breaks above 32.
High-volume shares and etfs below $20 that are possible covered-call candidates:
- GE, 15.71, bear mode, sideways since October,
- EWJ, 10.03, bull, sideways since September (with deep pullbacks)
- EWT, 12.40, bear, sideways since August
- LVS, 15.88, bull yesterday, sideways since July