Micron Technology (MU)

[JLS]

MU continues to surprise!

Can’t complain too much about that.

I like to sell Covered Calls to supplement what a trending stock can do on its own, but since the last earnings report and wave of positive articles, my CCs aren’t adding anything but trade commissions and small losses as I keep having to roll the Calls out and up just prior to expiration day (because I decided to keep the stock). An alternative I seriously considered a couple weeks ago (and ultimately decided against) was to allow assignment then commence selling Puts (and I wouldn’t mind if the stock was Put back in my possession), and in that way my small cumulative losses from each Call roll out could be reclaimed in a couple trades.

With MU’s strength, I need a new strategy. Now I’m going to assume that MU trades relatively flat from here for a number of days, just below the fifth tine and in the same manner that it traded below the fourth tine for about three weeks. So today I bought-to-close (BTC) the last Calls I sold. Done that a few times. Then I’m assuming a 5-prong fork and that price will continue to ignore the bottom two tines. That’s more bullish than the last time as I thought that 4 tines was all that the MU market could handle.

The other thing I’m doing differently is selling Calls out one week instead two. If that goes well, by respecting the top three tines, I should be able to compensate for the small cumulative Call losses from all those previous roll-outs.