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PIPC Update

Editor’s note: Michael is hosting a Perpetual Income Portfolio Club Live Trading Session on Monday, March 8, at 11 a.m. Eastern. If you have not already done so, register here.

Once you have registered, you will receive email reminders from our webinar provider, Zoom, prior to the session with a link to join.


 

Here’s where we stand with our Perpetual Income Portfolio Club positions heading into the weekend.

AAPL Mar Week One (3/5) 130 Call

Apple (AAPL) sold off with the rest of the tech sector this week as turmoil in the bond market hit pandemic and other growth stocks particularly hard. But we are talking about arguably (and I would argue this with anyone) the best company on the planet. So, I am confident shares will resume their uptrend.

Our call is on track to expire worthless and we will sell another one on Monday.

Current Stock Price: $118.31

Action: Watch call expire worthless

CHWY Mar Week One (3/5) 100 Put

Chewy (CHWY) has broken down and sliced through short-term support at $100. As with AAPL, the sell-off is not related to any fundamental problem with the company, but rather a broader risk-off trade due to bond market turmoil. I think the selling is overdone and money is likely to move back into CHWY and other quality pandemic stocks when investors get their appetite for risk back.

Let’s accept shares and we will sell calls that are well out of the money on Monday.

Current Stock Price: $78.97

Action: Accept shares

GLW Mar Monthly (3/19) 40 Put

Corning (GLW) was also hit by the selling in tech and pandemic stocks since it is both. Keep in mind that any news regarding a ramp up in the availability and production of vaccines is potentially good news for Corning, whose Valor Glass has been designed specifically for pharmaceutical glass packaging. I think investors will be pleasantly surprised when the company reports earnings next month.

Our put does not expire for another week, so we are simply watching the position for now.

Current Stock Price: $36.43

Action: No action is needed at this time

SBUX Mar Week One (3/5) 103 Call

Starbucks (SBUX) is holding up relatively well amid the choppiness in the broader market. I sat in a parking lot and watched people try to enter a local Starbucks. They reached for a handle that was not there, read the sign that said please go around the corner to the main entrance, and did so. I counted nine customers in 15 minutes in the middle of a weekday. My point? These folks were obviously just coming back to that store because the door handle has been missing for months. I think the company’s rebound in the United States is just beginning.

Our shares are on track to be called away. If they are, we will sell a put on Monday. However, if shares close below $103, our call will expire worthless and we will sell another one next week.

Current Stock Price: $103.44

Action: Watch call expire

Disclosure: I have positions or trade in and out of AAPL, CHWY, GLW and SBUX.

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