How to Sell Covered Calls to Create Portfolio Yield
With interest rates near zero, you need to get creative to find yield. One way to do it is to sell covered calls. Here's how it works.
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As you read Cabot newsletters and listen to investing news, you will probably hear technical analysis terms like ‘head-and-shoulders pattern,’ ‘trendline,’ ‘support and resistance,’ ‘double top’ or ‘double bottom,’ “triangle,’ and ‘gap.’ These are all different trading and movement patterns, and understanding them can be the difference between a successful and a failed investment.
Learning about these basic formations and how to read stock charts will make you a better, more profitable investor. Even a basic understanding of these charts can significantly improve your investing results. How does it work?
Technical analysis focuses on the price and volume activity of a stock. In its purest form, technical analysis assumes that all the fundamental factors of a company are reflected in the price of its stock. Technical analysis studies the market supply and demand in an attempt to identify where a stock’s price will go in the future.
By contrast, fundamental analysis involves analyzing the characteristics of a company to estimate its value. This includes examining a company’s financial statements and financial health, its management and competitive advantages, and its competitors and markets.
The key is to use technical and fundamental analysis together. A great chart is nice to look at, but the company may not be worth investing in unless it also has a terrific long-term growth story. Likewise, a company may have a terrific fundamental story, but its chart (which is really what you’re buying) may not look so good.
Only if both the technical and fundamental analysis looks outstanding should you consider a stock for purchase.
To learn more, download our FREE report, Technical Analysis of Stocks: How Relative Performance Works, Why Trading Volume is Important, and Other Chart-Reading Lessons.
With interest rates near zero, you need to get creative to find yield. One way to do it is to sell covered calls. Here's how it works.
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It flashed ahead of the end of the bull market in December. Could On Balance Volume divergence be signaling a bottom?
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Trading volume reflects overall market activity, indicating the sheer amount of buying and selling of securities. Here's why it's important.
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A double bottom chart pattern is a chart pattern used in technical analysis to describe the fall in price of a stock or index, followed by a rebound, then another drop to a level that’s roughly similar to the original drop, and finally another rebound.
Consequently, the double bottom pattern...
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This list of the best investment sites to research stocks aims to help individual investors navigate the sea of stock-related information on the web.
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Investor interest in Greentech is at all-time highs, but how does Cabot SX Greentech Advisor classify something as a "green stock?"
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What does volume mean in stocks, you ask? Trading volume reflects the overall activity of the market, and an important signal of sentiment.
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I break the best investment sites for small-cap investors into three categories: idea generation, stock analysis, idea capture. Here are a few that I like.
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Apple and Amazon are two of the most recognizable names on the planet, and good stocks. Which is the better buy? Let's break down Amazon vs. Apple stock.
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You would think the following technical indicators would mean more bad news for the market. But history shows it's just the opposite.
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Equities and crypto prices may be bottoming, so now’s the time to learn how to start trading cryptocurrency before the next leg up.
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Adding sector ETFs with the right "story" and the right technicals can help boost your portfolio returns, as long as you trade them properly.
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In bull markets, the 200-day moving average is pretty useless. But during extended corrections like this one, it's the most valuable indicator of all.
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We have a wonderful library of investing books here in the Cabot offices and refer to them very often. Here are some of our favorites.
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Buying a stock is easy, talking yourself into selling one is much harder, which is why you need a selling strategy before you buy.
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No matter how good a stock has been to you, it's vital to remember one absolute truth—all leading stocks are going to top.
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8 proven tips for turning $10,000 into a bigger fortune.
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Get the best resources for learning about companies and stocks—plus, best news sites and online tools!
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How to be a successful stock seller—timing really is everything!
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The pros and cons of two diverse investing approaches.
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