By Lawrence G. McMillan
This week’s feature article is a continuation of the one in the last issue. Here, we describe option strategies that are similar to owning stock, or are at least a way to reduce time value exposure, while still retaining some leverage in a speculative position.
What first appeared to be an oversold rally gathered so much steam that it has negated our previously bearish outlook (see indicator review, page 6).
One signal that did catch the bottom, which we were able to take advantage of, was our “modified Bollinger Band” signal. It is discussed on page 7.
Also, on page 7, the states of several other indicators are reviewed and updated.
A trade in Philip Morris (PM) is on page 8.
On page 9 there are several more recommendations: a conditional trade in Sugar, an earnings based straddle buy in Fedex (FDX), and two synthetic positions in T-Bond ETF (TLT) and Abercrombie (ANF). This strategy is desscribed in the feature article.
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