Five days ago, I adapted a new stock screening strategy to combine fundamental and technical parameters to select stocks for my modified covered call strategy. I set up covered calls on 3 stocks from my list: CRM, KORS and V.
1. CRM: CRM closed above my strike (175) with a gain. The call was in the money, so I did a credit spread (BTC 175 3/22 and STO 175 3/28) with a credit of 1.58. The weekly gain on CRM is 4%. CRM fundamental didn’t change much. The only technical parameter that changed is the RSI (>50%) on Friday. I kept the stock.
2. KORS: This stock needed down by Friday, but the options expired with a gain. Overall, there is a 1.2% loss on the week. Kors fell below SMA50. On Monday, if KORS is able to go back above SMA50, I’ll keep it and sell another call. If not, I’ll sell it.
3. V. Before the closing bell on Friday, V shot above 160, my strike. I tried to roll out the calls, but didn’t have enough time. So V is called away with a nice profit (~1.68% gain in 5 days or ~122%/yr).
Next week. I need to replace the expired calls and set up new ones. V is no longer on the FinViz.com chart (V’s RSI is >50 now). I will find a replacement for V.
