Handling Battered Earnings Plays
Yesterday's medicine is today's food poisoning. On Tuesday I wrote, "The SPDR S&P 500 (SPY) is approaching resistance in this upper $127 area, and I expect one more reality smackdown before the SPY runs to $129 and possibly $130.50." So it looks like disaster out there today, but I actually believe this dip will get bought. For potential areas on the SPY where we could see such action, I would watch $124.10 and $123.50 in particular.
Rather than sell my Polo Ralph Lauren (RL) November $155 puts, I went in this morning and bought stock against that position. I outlined this approach yesterday, citing it as the most likely strategic maneuver I would undertake, given that this stock has a recent history of bouncing after earnings-related selloffs. Under better market conditions, I believe Ralph Lauren would have been stronger this morning than it currently is....386 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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