Hello Investors,
Today we discussed relative strength and relative weakness, and how traders use strength signals to identify the highest-probability bullish candidates. When a stock shows signs of relative weakness, we typically avoid it or consider bearish trades instead.
We also spent significant time reviewing our TSSI trade. We closed out the 100 shares we owned for a profit, bought back the covered call, and replaced it by selling a put. Finally, we updated all of the numbers in the trading journal, which has been posted on the Investing Mentorship website. Enjoy!
We placed these together as a “covered stock” and collected a net credit of 10.95 (below I show each price individually)
Sold: TSSI 100 shares at 12.40/share
Buy to close: TSSI April 12.50 strike call
Debit: 1.45
Sold a short put in place of the exiting stock (this has the potential to repurchase the 100 shares lower in price)
Sell to open: TSSI April 12.50 strike call
Credit: 0.48
Have a great week!