3 Stocks & An ETF To Sell Puts On Now

Summary

  • Palantir is undervalued with their SPACs ownership stakes.
  • Intel is undervalued on transition timeline from impatient investors.
  • Warner Brothers Discovery is hated for sins of the past and hard choices being made right now (which I dove into over the weekend and like).
  • Bitcoin adoption is happening, get into the companies that support it.
  • Sell cash secured puts to bring down cost basis and/or build positions.

Retirement Income Options is a weekly piece that offers my top option selling ideas for the week. These ideas are primarily from the quarterly “Plug & Play” lists, but will sometimes come from the broader Very Short Lists (watchlists).

Make sure to read “Using Retirement Income Options” and “Technical Trading Basics” in the Getting Started area so you can follow my methodology and reasoning.

The following trades are generally for six and seven figure accounts. Remember to check out the noon Monday Retirement Income Options webinars live or on YouTube.

Quick Thoughts

I still think the S&P 500 (SPY) has to test its bottom again yet, maybe twice. The Fed tightening by shrinking its balance sheet will have repercussions, especially on capital intensive companies. I believe we see dramatic downward revisions of 2023 earnings during Q4 earnings calls.

That doesn’t mean wait to be a buyer. It means you have this time period to cherry pick the choppiness. We are already seeing SMID caps start to outperform. That is a signal that the bottoming process is happening.

The only way I don’t see being fully invested come December is if we rally hard the next few months causing me to continue to hold extra cash from trimming and selling covered calls.

Here are three stocks and an ETF you should have at least starter positions in and some puts to sell to capture premium and potential lower net cost. 

If you aren’t getting involved with these, then you don’t ever say you believe in buying low. These are all low. Can they go lower? Sure, but they won’t stay lower for long. Scale in over coming months. Start now if you haven’t already.

Big earnings edition Stocks of the Week update for tomorrow with several buy reiterations (including those below). 

Intel (INTC)

Semiconductors have been under a bit of pressure of late, but Intel’s future building designs for other companies got the money from the government that wanted. There’ll be hiccups along the way, but Intel doesn’t get this oversold often and I think it is also undervalued by 30-50% right now.

Intel this oversold on RSI has always been a buy signal. 

Intel RSI Monthly (Kirk Spano)
  • I’m selling the INTC $35 December puts for $2.50+

Make sure to have at least a starter position on this dividend payer with fortress balance sheet and government aid. 

Palantir (PLTR

People don’t understand Palantir yet. Maybe they never will, but Millennials and Gen Z are buying in. In short, Palantir is an AI driven software-as-a-service business serving governments and business. You can get a good glimpse by looking at Palantir’s announcements.

The wildcard, which I believe offers substantial additional growth, that the market completely ignores now, is Palantir’s ownership in other companies. That ownership resulted in a write down this quarter that caused EPS to come in at -1¢ versus estimates of 4¢. BlackSky (BKSY) is one of those companies and since the end of Q2, when the write down was made, BKSY is up. 

  • I am selling the PLTR $9 November puts for $1+

I already own a half position in PLTR and if assigned would become a full (3-4%) position. You should have or take at least a starter position at these prices, which I believe will be very temporary.

PLTR Undervalued & Nearly Oversold (Kirk Spano)

Warner Brothers Discovery (WBD)

I read through the changes being made at the company and they are in line with what I expected a year ago. Watch for the Batgirl movie to be resurrected for the big screen with December 2023 premier. And, watch for the stock to also be resurrected as costs and debt fall as global revenue increases in 2023.

I already own a bit more than a full position in WBD, but am once again selling puts to reduce my net cost.

  • I am selling the WBD $12.50 December puts for $1+.

These are unlikely to be put to me, but if they are, fine, I’ll take’em.

I also like the same puts I recommended in the July 25th RIO piece if you do not have any WBD yet.

  • Sell WBD $15 November puts for $2+.

Weekly Technicals:

RSI is crushed. It’s also beaten oversold on the monthly chart indicating a long-term bottom is near. 

If you’re very conservative and don’t have a position you can use the $12.50 puts to try to be more perfect, but, I’d really take a starter at least here. 

Van Eck Digital Transformation ETF (DAPP)

Bitcoin has about 25% adoption by institutions and family offices so far and only tiny pieces yet. But, last week, BlackRock (BLK) but a deal with Coinbase (COIN) to bring investing services to institutional investors. Kevin O’Leary, “Mr. Wonderful” from Shark Tank, is also pounding the table on this theme. Finally, Dr. Sean Stein Smith, who I interviewed around New Year’s, is chronicling the adoption theme at Forbes. 

Crypto Adoption Is Accelerating – What Should CPAs Discuss With Clients?

DAPP is off of its bottom and if it retraces, it won’t stay down long. Rules on crypto are coming slowly but surely. The stock sin DAPP are low for now. I like this entire basket: 

DAPP Holdings (VanEck)

That’s a great basket of stocks and is concentrated enough that we don’t have to take individual stock risk (though I do own Marathon and sold the SQ November $70 puts per  July 25th RIO piece) 

Here’s the technical look: 

Pretty much nailed that bottom. A small retrace is likely, so puts are a nice play to try to catch year-end selling. I would also have at least a small position per the August Global Trends ETF report.

  • Sell DAPP $7 December puts for $1+. 

Disclosure: I/we have a beneficial long position in the shares of PLTR, WBD, INTC, DAPP either through stock ownership, options, or other derivatives.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.