Investors are focused on the prospects for increased fiscal spending (stimulus) to drive growth in 2021.
We are tentatively optimistic ourselves, but we are still focused on a short-term outlook while valuations are so high.
So, if momentum is strong, we are still willing to add some risk, but we will remain flexible as new information emerges.
We have been holding off on adding Logitech (NASDAQ:LOGI) while we waited for earnings.
We were a little concerned that positive expectations for the COVID-19 vaccine would hit some of the “stay at home” stocks hard in January.
However, after reporting another all-time record quarter on Jan. 18, management did a good job explaining why they expect growth to continue the way it has been.
For the most part, they made the same argument that we did when we first added LOGI to our trade list last year.
The pandemic has created a shift in favor of remote work, entertainment, and learning that offers advantages that consumers are not likely to give up regardless of a return to normalcy.
Daily Chart of Logitech (LOGI) – Chart Source: TradingView
In our view, this puts LOGI is in a solid position to continue growing profits in the short-term.
We think selling to open a new put write on LOGI is a great strategy at this time to generate some additional option premium.
From a technical perspective, the $100 level is running through two bullish pivot points that we expect to act as support through February.
On the date of publication, John Jagerson & Wade Hansen did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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