Looking For Capitulation Trades

Summary

  • A number of companies are at or near bottom fishing, and several others are closing in, we are looking for “capitulation trades” to maximize income and minimize any assignment prices.
  • Growth stocks include: Unity Software, SunPower, Ginko Bioworks.
  • Dividend stocks include: Intel, Ford.
  • Use volatility as a tool to make good investments and do not let it scare you out of good investments.
Call and put option trading signs

Retirement Income Options offers my top option selling ideas. The stocks and ETFs are from the quarterly “Plug & Play” lists and Global Trends ETF.

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. 

Consult the VSL for long-term charts. Consult recent articles for intermediate term charts and commentary (use article search bar).

Featured Trades This Week

Until we are sure the bear market is over, we are focused on getting net buy assignments at about our bottom fishing prices. Set your strike a bit lower and accept less premium if you already have a full position in a security. If we see a rally in coming weeks or months, we might go back to selling covered calls.

Always remember to use GTC orders to use volatility to your advantage.

Ford (F) has a primary wave setup around $10-11 and that’s where I have my bottom fishing as well. 

  • Sell F $11 March puts for $1

Intel (INTC) has some downside to the lower $20s, but I don’t want to quibble too much given the tremendous upside. 

  • Sell INTC $30 March puts for $3

Unity Software (U) is plumbing bottom fishing and showing a good base technically. Earnings are Feb 1st and I want time value to burn off if earnings are good, or a lower cost basis if there’s short-term disappointment.

  • Sell U $25 May puts for $4 

SunPower (SPWR) has a very attractive growth curve and has been chopping in teens a while now. Earnings are Feb 1st and I want time value to burn off if earnings are good, or a lower cost basis if there’s short-term disappointment. 

  • Sell SPWR $17 puts for $2

Ginko Bioworks (DNA) continues to scale operations and add streams of revenue on their platform despite lumpiness which is causing depressed price in my opinion, aka, opportunity. Value in codebase likely exceeds market cap of stock. Over $1b on balance sheet. I have a half position now and continued execution could lead to a full position.

  • Sell DNA $1.50 puts for $.25

GTC Orders

Lists are roughly rank ordered. Remember to check current option prices and always ask for a little more than the ASK or a higher limit when entering your order. You can walk the premium price down after if needed.

Remember to use weekly RSI, open contracts and Maximum Pain as a guide. 

S&P 500 Growth Stocks

A combination of growth and value with strong intermediate term runways. Of note, there are not many “growth” companies on the S&P 500 as few have growth rates over 20% because they are already large. Most of the S&P 500 companies worth owning pay a dividend and appear in the S&P 500 Dividend Stocks below. I’m only including stocks here with a dividend below 1%.

CompanyBottom FishingGTC Orders
Berkshire Hathaway (BRK.B)270
Alphabet (GOOG)7585 March put 9
Amazon (AMZN)6675 March put 8
Nvidia (NVDA)90
Warner Bros Discovery (WBD)1312.50 March put 1.50
Freeport McMoran (FCX)13
Generac (GNRC)7885 May put 9
Occidental Petroleum (OXY)6060 March put 3
Tesla  (TSLA)50– 

Mid Cap Growth Stocks

$3b to $20b, or $20b+ but not on the S&P 500. Higher growth potential than the large caps in most cases.

CompanyBottom FishingGTC Orders
Square/Block (SQ)53 ↓ 60 March put 7
Unity (U)30 25 May put 4
SunPower (SPWR)1416 Feb put 2
Shopify (SHOP)29 ↑35 March 6
Palantir (PLTR)77 March put 1
MP Materials (MP)1825 March put 5
Uber (UBER)2225 March put 3

UPDATED TO MID CAP GROWTH AS OF 1/10/23 – WILL DO REST THIS WEEKEND

Small Cap Growth Stocks

Under $3b or not regularly profitable yet. Here’s where you will find a bit more “high risk” in our lists. Not all small cap stocks are high risk though. Some are just more volatile. There is a difference. Many of these are market risk, though some are indeed high risk. See the VSL for risk ratings.

This where we could see 10x stock moves or better. You must decide how much of your portfolio can hold high volatility and/or high risk. In general, buy starters or 1/2 positions until companies demonstrate execution and/or start to move off of a technical bottom. Long basing patterns are interesting.

CompanyBottom FishingGTC Orders
Aemetis (AMTX)5$5 January put $1
Ginko Bioworks (DNA)42 Jan put 40¢mostly buying under $2
Enovix (ENVX)9$10 February put $1
Heron Therapeutics (HRTX)44 March put 1+mostly buying under $4
AST SpaceMobile* (ASTS)55 Feb put 1+
Rocket Lab* (RKLB)54 Feb put 1+just took a stock starter
Planet Labs* (PL)5$5 January put $1
Satellogic* (SATL)55 Feb put 1+mostly a buyer under 5
BlackSky* (BKSY)42 Feb put 40¢mostly a buyer under 2
Spire Global* (SPIR)42 Feb put 80¢mostly a buyer under 2
Stone Capital (STNE)89 Feb put 1
Jumia (JMIA)54 Feb put 1mostly a buyer under 4

* Space basket.

S&P 500 Dividend Stocks

Looking for strong dividend growers and hidden value. Value usually comes from hidden future growth, ability to pay down debt often quickly (often by reducing capex) or company assets the market is not assigning enough value to (or in many cases no value).

CompanyBottom FishingGTC Orders
Microsoft (MSFT)142
Apple (AAPL)80
Ford (F)1111 March put 1
Intel (INTC)2830 March put 3
American Tower (AMT)156
Pfizer (PFE)3840 March put 4
Kinder Morgan (AMT)1517 Feb put 2
Paramount Global (PARA)1820 Jan put 2
AT&T (T)1718 March put 1
AbbVie (ABBV)85
HP (HPQ)2125 Feb put 3
Cisco Systems, Inc (CSCO)30

Non S&P 500 Dividend Stocks

A lot of special stories here that could yield large gains, including special dividend payouts.

CompanyBottom FishingGTC Orders
New Fortress Energy (NFE)3335 Feb put 4let’s see what volatility gets us, might settle for less
Permian Resources (PR)8$9 February put $1
BlackStone (BX)60
KKR (KKR)39
VICI (VICI)23
Innovative Industrial Properties (IIPR)78
STAG Industrial (STAG)24
Digital Realty Trust (DLR)78

ETF Core Holdings

Diversified and market cap funds.

ETF EquitiesBottom FishingGTC Orders
Invesco QQQ (QQQ)201
IShares Evolved Technology (IETC)3235 March put 3
BlackRock Science & Tech (BST)20n/a
Invesco Midcap Momentum (XMMO)6070 March put 3
Invesco Small Cap Revenue (RWJ)6775 April put 8
Emerging Markets Internet & Ecommerce+ (EMQQ)2835 April put 7
iShares 20 Plus Year Treasury Bond ETF (TLT)6270 Feb put 7
Emerging Markets Bond (EMB)82

ETF Tactical/Satellite Holdings

Sector, industry and nation funds.

ETFsBottom FishingGTC Orders
SPDR Energy Select (XLE)46Feb 76 put 4Energy is in a bull market until proven otherwise, so using top of buy zone.
Invesco Solar (TAN)6170 April put 9
First Trust Nasdaq Clean Energy (QCLN)3235 March put 3
Invesco Wilderhill Clean Energy (PBW)3135 March put 4
Blackrock Science & Tech II (BSTZ)14
ARK Fintech Innovation (ARKF)12
ARK Genomic Revolution (ARKG)2228 Feb put 3
AdvisorShares Pure Cannabis (YOLO)34 Feb put 1
Pure U.S. Cannabis (MSOS)56 Feb put 1
KraneShares China Internet+ (KWEB)2225 Feb put 3
Frontier Internet & Ecommerce+ (FMQQ)10

+ Feel free to break apart your EMQQ position into FMQQ + KWEB, or to overweight a portion of your EMQQ position with FMQQ or KWEB.

Disclosure: I/we have a beneficial long position in the shares of f, u, dna, intc, spwr either through stock ownership, options, or other derivatives.