Uptrend to continue? Writing cash secured puts on promising IBD100 stocks; GMI: 2; GMI-R: 4

The QQQQ short term up-trend is now in its 4th day.  GMI1212

However, there were only 4 new highs and 100 new lows in my universe of 4,000 stocks on Friday.   Still, 58% of the Nasdaq100 stocks closed above their 30 day averages. The GMI closed at 2 (of 6) and the more sensitive GMI-R is at 4 (of 10).   I tend to look to buy stocks when the GMI rises to at least 3. Friday was the 4th day of the current QQQQ short term up-trend. In a few days I will have a better idea if this up-trend has legs……..

In an up-trending market (as measured by the QQQQ), I like to trade the IBD100 stocks.   The IBD100 lists contain the top 100 growth stocks that meet the stringent IBD technical and fundamental criteria.   A new list is published by IBD each Monday.   From time to time, I create a watchlist in TC2007 containing the current IBD100 list.   I now have a watchlist containing about 660 stocks that have appeared on selected IBD100 lists over the past year.   The IBD100 growth stocks tend to perform quite well when the market is rising.   Tonight, I ran a TC2007 scan I have created, on the stocks in this IBD100 watchlist and found 10 present or former IBD100 stocks that appear to be in strong up-trends: EBS,DLTR,ALGT,THOR,INT,APOL,AVAV,LHCG,SHEN,GTIV. I do own a couple of these. But I also have written cash secured put options on some of these stocks with strike prices below the support level .   I am basically betting that the stock will not break below support by option expiration this Friday.   If this technique works out, I will write more about how I do it in a future post.   Writing cash secured puts is equivalent to writing covered calls on a stock, but I do not have to start out by buying the stock.   The cash backing the puts I sell stays in my account in a money market fund and continues to earn interest.   So, I receive the premium from selling the puts AND the interest from the cash backing them.   Quite a nice (but not risk free) income generating technique in my IRA……

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