Against a backdrop of high-profile earnings misses, there are a number of big-cap stocks trading and breaking out to the upside on powerful sector moves that aren’t getting nearly enough attention. Those companies failing to match Wall Street estimates or expected optimistic guidance include Intel (INTC), United Healthcare (UNH), IBM (IBM), Coach (COH) and Abbott Labs (ABT), among others.

The feel-good market of 2013, thanks to unlimited Fed stimulus, is giving way to a more discretionary market regarding winners and losers. Investors are scouring the numbers closely to determine fair valuation, which means the market will elevate on fewer names going forward. Not everything is going to rally on the expectation that QE cures all corporate ills. As the Fed winds down its monthly bond purchases, the idea of a safety net for all equities is diminishing greatly.

Call it a reality check or just a reversion to the norm, but it’s a constructive development that will provide better transparency to the economy and remove what was becoming a bubble according to numerous equity valuations. I, for one, am very positive about the current phase of trading consolidation and expect the market to make a nice move higher in the next three to four weeks as more of the pure big-growth companies report numbers.

I’m excited about earnings season, as I believe that it will bring new legitimacy to the names I’m trading and recommending. More money will be chasing fewer names as the market rises further. That’s how bull markets operate — and this time around is no different. The cream always rises as the bull trend matures and punishes those companies’ shares that fail to deliver.

As such, I’m inclined to use this pullback to build bullish positions, and one of my favorite trading strategies for securing steady income is covered calls. Coming off January options expiration, my Cash Machine Trader members had eight stocks called away for net returns ranging from 4% to 12.75%, and we were able to collect 100% of the options premium in another six names.

Now is the time to start loading up on positions for a February options expiration payout, and here’s a covered call on a bullish blue chip to get you started.

TASER International (TASR), the maker of stun guns, handily beat estimates in its most recent report thanks to the recent introduction of police body cameras. The cameras are worn on the shoulder to record at-the-scene video evidence that has virtually eliminated the “he said, she said” courtroom dialogue when evaluating arrests, traffic violations and other crime scenes. This is truly game-changing technology for enforcement agencies and has wide range of use for all manners of security applications.

TASR stock recently jumped after it announced a wave of new orders that spiked the shares to a new 52-week high of $18.88 earlier this month before coming in about a point trading to $17.80 in Wednesday’s session.

This is an excellent entry point, I recommend buying TASR shares at market and then placing a limit order to sell to open the TASR Feb. $20 calls at $0.50 or more per contract, good till canceled. A note that we’ll need to see a slight pop in TASR’s trading to get that level of call premium, but we shouldn’t have to wait long.

TASR reports earnings next on Feb. 26, just after February options expiration. In the same quarter last year, the company posted a 20% earnings surprise. My expectation is that the stock will rally ahead of earnings and it will be trading above the $20 strike price so that shares will get called away.

With a stock entry around the $18 level and including option premium, traders who put on this covered call position stand to capture a 13.8% return in less than a month’s time.

Bryan Perry is the editor of Cash Machine, a newsletter focused on high-yield income investing with the goal of maintaining a blended total yield of 10% across two portfolios. Bryan is also the editor of Extreme Income, which uses the power of historically cheap money to create a leveraged “baby hedge fund” strategy that paves the way to massive profits and 4x greater income.

Now is the perfect time to join Bryan Perry’s breakthrough income investing service, Cash Machine Trader, and discover how selling covered-call options can help you manufacture ‘top-up dividends’ of up to 30% per year.