You do the exact opposite…

It is difficult to master this strategy but you will find profits come quicker with less risk. A simple idea of buy on weakness and sell on strength.

When the common investor sees a stock plunging most begin to panic. It is often best to buy when "blood is in the streets." Once there are fewer sellers the price of stock starts to rise.

This strategy should only be used on a great business with strong fundamentals that pulls back in a big uptrend. The pull back offers a great opportunity to buy. The downside is limited by using stop losses.

Today's opportunity fits the bill.

This has been a great stock to trade for income. It has had regular pullbacks during the uptrend.

The stock is luxury fashion brand Tapestry (TPR).

Tapestry (formerly Coach) is a $13 billion company that operates more than 1,400 stores around the world, selling handbags, wallets, clothes, footwear, jewelry, and other high-end accessories. It is a very attractive business with 13% profit margins.

In the chart below, see that Tapestry has been in an uptrend over the past few years.

Tapestry has fallen sharply to its uptrend line several times and has bounce higher each time.

To play this trend.

I suggest selling the July, $45 puts on Tapestry for $1.15 (use a Good Till Cancel Limit Order). That is an upfront payment of 2.6% or 21.7% annualized return.

If Tapestry holds above $45 through July 20, put sellers will keep the $1.15 free and clear.

If Tapestry closes below $45 on expiration day, put sellers will buy shares at a discount to the current price. For every 100 shares you own, you can sell covered calls to generate more income.

For protection use a stop loss at $39.75. This is below the uptrend line which will be a break of support and it is best to exit with a small loss instead of hoping and praying things will work out.

Take advantage of this great business trading on weakness by selling puts today.

Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.

P.S. Trade Updates:

Gold royalty firm Royal Gold (RGLD) is at a nine-month high of $92.44. If you sold the July 20, $90 puts, you're on track for a 23.2% annualized return. Hold on with a stop loss at $79.50.
Original Post: https://busy.org/@slider2990/precious-metals-blues-collect-more-cash

Mobile chipmaker Qualcomm (QCOM) is at a two-month high of $59.84. If you have been following my recommendations you were assigned shares and sold the July 20, $57.50 covered calls. This trade is on track to earn 12.4% in a little less than four months or 39.5% annualized. Hold on with a stop loss at $49.
Original Posts: https://busy.org/@slider2990/collect-big-checks-from-this-tech-leader
https://busy.org/@slider2990/time-to-collect-more-cash-on-this-tech-giant