Hello Everyone! I recently had a successful play on ATT purchasing some calls before this past weeks uptrend on T Unfortunately, since I didn't enter the trade with any real, calculated goal targeted, the position was exited once I saw an enticing percentage of gains. While I'm overall happy with the results, I couldn't help but notice the disappointment in myself as the price on the calls continued to rise even more after I sold them, knowing I could've quite easily returned even more from the position.
So I've pulled up AT&T to get a closer look to see if I can identify any other clear opportunities on a new position. If things play out along with my idea, I'll enter a new position and this time with a more calculated plan- as is my main trading goal for this new year. To trade with more calculated entries and target goals to exit & improve accordingly.
T seems to be bouncing within a more symmetrical triangle pattern, with no real success breaking out- as noted by the circles marking the failed attempts. Personally I'm predicting that with some of the new business strategies AT&T is aggressively taking on recently, we could see some buyer confidence based off of those fundamentals. This could support the possibility of finally breaking out of this Symmetrical Triangle. We also seem to be retesting the resistance more than the support. If price breaks above the horizontal line (marked BULLISH), a pullback using that line as new support would be a great point for an entry. The top of that green arrow marks the target, slightly under $37
While watching this play out, I'm considering if taking on this move in the form of going long on both shares & some Options calls would be a strong move? That play would require some closer consideration to avoid over exposure to risk.
I say that, because at this point it seems equally telling that ATT could continue downward, especially if resistance holds on a retest and buyer confidence weakens.
I've laid out the 50 MA (thicker white band) & the 20 MA (thinner yellowish band) the 50 MA will help as a tool to plot safe stop losses without being too overprotective of the position resulting in getting stop'd out.
I'll try to update on which way my view of this potential plan plays out on this idea.
Please feel free to give friendly but honest critiques! Happy Trading!
*this is not financial advice* **all my charts are for educational & personal tracking purposes**
I have been looking for an T breakout to the up side for a while. Prepandemic, T had reach 39. And with a 7.5% dividend, the upper 20s is going to be a strong support. While I hold a great deal of T for the dividend, I use 1/3 of the holdings for covered calls in the 31 strike range. Along with selling puts on pull backs to below 29 has produced a good high return.
NillaCoin
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@LEEAPATRINOSTRO, this was probably my favorite income generating strategy, started putting it into action about a year ago after diving into Guy Cohen's Bible of Options Strategies.
would hold a decent sized bag of shares I felt slightly bullish on. Sell OTM calls regularly, if exercised would switch over to puts, or look for a new symbol to trade.
LEEAPATRINOSTRO
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@NillaCoin, been running that strategy for many years. T is an excellent stock for this. It has both long term and short term ranges. In addition to waiting for your position to be called if way in the money, a position can be rolled over indefinitely to continue collecting the dividends and waiting for a pull back before put selling. Given a 7.5% dividend, that’s not a bad worse case scenario.
hushedDingo72628
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I have a 3/19 $31.5 call. I'd like to know what people think of this situation, too. Thanks!
LongorShortsWhyNotPlayThemAll
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@hushedDingo72628, I had 3/19 $30 call already sold and rolled over another week for more time.