Long O(versold) - see what I did there?Another unlikely hero, NYSE:O has become oversold for me 13 times in the last year (since the end of last fall's mini-crash). It has only stayed oversold more than 2 days twice in that time.
Additionally, over 80% of the lots that would have been purchased in that time would have been profitable trades within 1 trading week and the most common length of time it took to become profitable is 1 trading day. All trades would have been profitable except (so far) the ones that would have opened yesterday and today.
It doesn't hurt that it's nearing support, either. Also, the rate cut will help all REITs simply by making their dividend more competitive vs. CDs and bank rates. I think this selloff is a mistake, too.
A lot of traditional "conservative" dividend payers like NYSE:PG NASDAQ:PEP NYSE:CL NYSE:KO and NYSE:DUK are on sale today just because I think people are moving to more risk on names because of the rate cut. The drop in consumer staples AMEX:XLP might also be related to the 50bp rate cut falsely signaling the Fed thinks the consumer is weak, but consumer discretionary AMEX:XLY is very strong today, so I don't think that argument holds water. If that was true, I'd say XLY falters before XLP does. People can go longer without a new TV or new phone than they can staples if they're struggling.
If the general sentiment becomes risk off for any reason again next week, and I think it could despite the cut, "safe havens" like NYSE:O or NASDAQ:HON could benefit from rotation. Or they could keep going down and I just add more. If they do, I suspect some of my other more risk on ideas will be doing well while I wait.
O is also nice if you get stuck holding a while because it pays a monthly dividend. I don't pin hopes on dividends, but you know me - I'll never turn away free money.
I will sell any lots as soon as they become overbought and profitable.
So I'm going long at 60.80. I'll add if it stays oversold.
And by the way, I'm not apologizing for my typically boring charts. Charts that make me money don't need to be beautiful. The call just needs to be correct. But I spruced this one up with some pretty colors just because it's Friday. Have a good weekend!
This is financial edutainment. If you trade my ideas, it's on you.