DJIA Chart Study, Buying Dividend And Income Fund (DNI)

Given we are expecting a market bounce, late Tuesday we purchased TNA October $58 calls for $2.75 and November $59 calls for $4.75 as well as TNA shares for $58.25 

If all these go our way, we'll be quick to book profits.  If we fail on the October calls the November calls might bail us out, and failing that we can hopefully make up for it by sitting with the shares and perhaps adding to them on significant drops.  That's the plan for now.

We do still maintain these short positions for balance, and will book the gains if the market continues much lower.  The net result is that we're currently bullish very short term and remain bearish in the intermediate term and longer term.  That's a bit convoluted and risky, and while some would just close out the shorts rather than add longs to the mix we're reasonably comfortable with this positioning.

We have several reasons to be short-term bullish, however there is not yet an actual bullish indicant suggesting a bounce will soon begin. 

In part we're going on instinct, and in part thinking there will be a bounce because the DJIA closed Tuesday just 50 points above its 200-day moving average (not shown on DJIA chart below) and about 25 points above a 7-month uptrend (in red on DJIA chart below).

Also, as can be seen on the DJIA chart below, the current range has been an area of resistance and support several times this year (highlighted in yellow).

We're buying the Dividend And Income Growth Fund (DNI).

We're not going to suggest it's a value play.  For us the bottom line is that if we're going to hold long positions we're wanting to get paid to do so given our belief that equities are generally very overvalued.  DNI is currently offering more than 11% yield based on the latest close of $13.96.

On the chart we see what we hope will continue to be a long-term supportive trend (in red), and we note that the past two years there has been price support just below $14:

Recent Payouts        

                                                 

Amount	Ex-Dividend Date	Record Date	Pay Date	Declare Date	Qualified? [?]	Type
$0.408	9/13/2013	9/17/2013	9/30/2013	9/3/2013	Unknown	Regular
$0.408	6/13/2013	6/17/2013	6/28/2013	6/3/2013	Unknown	Regular
$0.408	3/13/2013	3/15/2013	3/28/2013	3/1/2013	Unknown	Regular
$0.408	12/12/2012	12/14/2012	12/28/2012	12/3/2012	Unknown	Regular

Per the fund's website:

Top Ten Holdings as of August 31, 2013:
 

1.	L Brands, Inc.
2.	Intel Corporation
3.	General Electric Company
4.	Bristol-Myers Squibb Company
5.	3M Company
6.	Energy Transfer Partners, L.P.
7.	Johnson & Johnson
8.	Honeywell International, Inc.
9.	Merck & Co., Inc.
10.	JPMorgan Chase & Co.

 

Top ten holdings comprise approximately 20% of total assets.

We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the positions we do, or for mentioning any positions or publicly traded companies in this blog. If we hold existing positions we divulge the fact. This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

Please presume that we, she, he, I, it, them, they, us and you are purely fictional characters and that everything written in this blog is satire intended for comedic amusement only, and not to be taken seriously in any way. Just like "real" analyst proclamations. Thank you.


To be notified when this blog is updated : Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly. We have never shared our mailing list with anyone, nor will we. Please note that we only send update notifications when a trade idea is diarized or updated materially, not if a blog entry only contains general commentary.