Put Selling T Stock For Short-Term Gains – Dec 31 2012

In my most recent article on T Stock I explained that AT&T Stock is showing significant signals that advise being careful at put selling at the money or near at the money. You can read that article on T Stock through this link.

T Stock since November’s pullback has held the $33 level. Put Selling too far out in time at present is not something I am interested in doing. T Stock could be setting up for a move lower although the stock continuing to hold at the $33 level could be considered a good sign or it could be a sign that T stock is having trouble recovering.

T Stock 3 Month Chart

You can see in the green arrow in the chart below that T Stock does appear to be trying to climb higher but continues to run into heavy resistance.

Meanwhile the red arrows are showing an attempt to establish higher lows but not very successfully.

T Stock Dec 31 2012

T Stock Dec 31 2012

This does not mean Put Selling against T Stock is not a good idea. It does mean though that as per my other article it would be foolhardy to do Put Selling at the money and certainly not do Put Selling far out in time. Instead today I did Put Selling for the January 2013 options expiry at the $32 put strike.

This places me out of the money and earns 1% for 3 weeks of risk. It also means if T Stock should fall below $33, I will have time to buy back the $32 naked puts and roll down lower. Personally I think T Stock has enough support to keep it above $32 until the middle of January. I don’t mind closing early if the naked puts fall to below .10 cents in value. It should be an interesting trade.

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