The Money Tree

Safely Generating Income in Retirement

New Scan – Potential Trades (7/11/2010)

Posted by mounddweller on July 11, 2010

I ran a VISIONS Scout scan this afternoon.  I was pleasantly surprised at the outcome.  As many of you are painfully aware quality stocks meeting Ron’s criteria for selling Covered Calls (CCs) and Naked Puts (NPs) have been few and far between of late.  My scan this afternoon produced a list of 61 stocks that made it to level 4 on the Scout search engine.  Of these 28 had a Gold$ of 80 or higher and 8 had a Gold$ of 100!  A screen print of the those with a Gold$ score >= 80 is presented below.

Two of the 8 with a perfect Gold$ of 100 peaked my interest.  They are EJ and SQM.  Both are foreign companies, EJ is a Chinese real estate company and SQM is a Chilean mining company.  Another Chinese company that caught my eye, GAME, has a Gold$ score of 98.  Last but not least, one of my recent favorites is back on the list and caught my eye.  Gamestop (GME) is well down the list with a Gold$ score of 88 but has a nice looking chart. 

Look at the stocks that caught my eye and the other stocks on the list.  Perhaps you’ll see something I didn’t.  Let me know what looks interesting to you.

Good trading…

Troy

Advertisements

2 Responses to “New Scan – Potential Trades (7/11/2010)”

  1. Dave D said

    Hi Troy…

    Great web site… I find it very informative…

    Recently I read Rons Show Me The Money and was very impressed…

    So I have a few questions to ask you regarding what method you use as a trader…

    1) Is there any other technical criteria you use for selecting stocks other than Rons criteria? For example, do you look at other indicators, support/resistance lines, candlestick patterns ect?

    2) Do you ever go long in a position and wait on selling calls? If so, under what circumstance would you do this?

    3) When stocks do go agaisnt you do you look to sell calls or puts (on the stock) to lower your cost basis?

    4) If you anwsered yes for number 3, when do you time your short positions in order that you are not exercised on the short positions? What criteria do you use?

    Thanks Troy… All the best with your trading… Dave

    • mounddweller said

      Dave,

      Glad you like my blog. As you probably have seen already I don’t post everyday. It all depends on what is happening in the markets and how busy I am with my other commitments. Below are my responses to your questions:

      1) I generally do not use any other indicators beyond those used in Ron’s methodology for timing my entry into a position. However, I do look at other fundamental criteria as part of my due diligence before placing a trade. I look at basic things like PE ratios, net cash, operating margins, ROE, etc.

      2) I used to occasionally go long in a position and try to time my entry on selling the calls. However, I found more often than not it would have been better to buy the stock and immediate sell the covered calls. So, I don’t do it anymore.

      3) Yes.

      4) I have no set criteria for timing my entry. I try to wait until I feel certain the stock has bottomed out and is beginning to recover. However, since I lack the ability to see into the future, sometimes I get it wrong. Thus, I never go ‘all in’ on a position. I always try to leave myself some ‘wiggle room’ (additional capital I’m willing to invest in the position) so I can get myself out of a tight spot if the stock continues to move against me.

      A good example of this is my current open position in MYGN. I bought the stock and sold covered calls against my position back at the end of March. It was a bad trade. I didn’t do a thorough job in my due diligence and missed the fact that they had a court case pending that could negatively impact their future earnings potential. That court case went againtst them and the stock tanked. My net cost is around $23.60 and the stock is current down around $15. I have been waiting for several months for the stock to find a bottom. I think it finally has and I’m now considering selling AUG $15 puts. If I have the stock put to me at $15 it will go along way to reducing my average net cost and will allow me to begin selling covered calls much sooner as the price recovers. If the puts expire worthless I will either sell another round of $15 puts in September or if the stock has moved significantly higher I may sell September $17.5 puts.

      Again, glad you found and like my blog.

      Regards,
      Troy

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

 
%d bloggers like this: