This daily posting tracks my covered call plays for October and other base positions.
Today is the last day October covered calls can be traded. At current prices, the options on JNJ, MCO and GMCR will expire worthless, meaning I keep the premium and the shares. The rest will be exercised.
MCO is within 50¢ of the strike price. It will take only a small rise in today’s trading to put it in the exercised column.Covered Calls
BIDU drops to the Fibonacci 38.2% retracement level of the decline from Sept. 20 to Sept. 30.
CAR has paused at the Fibonacci 78.6% retracement of the decline from Sept. 16 to Oct. 4.
CNX is trading above the Fibonacci 61.8% level as it retraces the declines from Aug. 31 to Sept. 6.
COG is trading at the mid-range of a sidewinder channel that began Aug. 9.
CVI is dropping from near the ceiling of a sidewinder channel that began Aug. 1.
GMCR’s sharp decline has brought it to levels last seen in an extended sideways pattern last April. It is now trading near the lower boundary of a downtrend channel that began Sept. 20.
HAL has stalled at the Fibonacci 23.6% level as it retraces the decline from July 25 to Oct. 4.
JNJ is trading in the middle of a gently declining downtrend channel that began Aug. 31.
KEG has stalled at a Fibonacci 23.6% retracement of the decline from Aug. 1 to Oct. 4.
MCO has dropped below the floor of an uptrend channel that began Aug. 23.
NOV is trading just below both the 20-day high and the Fibonacci 50% retracement of the decline from July 26 to Oct. 4.
SPRD is trading in the upper third of an uptrend channel that began July 29.
TKR is trading at the ceiling of a sidewinder channel that began Aug. 9.
TPX has again broken above its 20-day high and pierced the ceiling of a sidewinder channel that began Aug. 19.
Other Base Positions
- phase: 20-day price channel phase, with green for bull trend, red for bear trend and yellow for neutral trend.
- trend: Price direction, green for higher highs and higher lows, red for lower highs and lower lows, yellow for sideways, and grey for neutral or ambiguous.
- adx: Average directional index location, indicating the strength, or the temperature, of the trend. Orange for 40 or greater, aqua (light blue) for 25 and up but below 40, magenta (light purple) for 20 and up but below 25, and brown for anything below 20. (Mnemonic: Orange for the overhead sun, blue for the surrounding sky, magenta for sunset on the horizon and brown for the earth.)
- 200/50: The moving average cross, green for the 50-day ma above the 200, red for below and yellow for closely aligned.
- 40/10: The moving average cross, green for the 10-day ma above the 40, red for below and yellow for closely aligned.
About my trading methods
Read a detailed explanation of my analysis method, including trading rules. These don't, at present, discuss my covered call strategy, which is under revision.
Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.
The trader’s greatest sin is inaction. Sleeper, awake! Seize the Nietzchean moment. Roll out of bed and trade.