CSCO short term short scalp with putsSomeone once told me never to short a stock on a bull run. My algo at that time said the stock was historically overbought, so of course I listened to the algo. I made 42% the next day. I can't say who was right or who was wrong generally, but I usually listen to the algo and I'm doing it again.
My algo tells me CSCO has been overbought for 6 days (including at this point today). It has only stayed overbought for that long 3 times in the last 8 years, and the most recent time was March of '21. I'm betting that this 6 up days in a row rally takes at least a one day break in the next 1 or 2 trading days, possibly as early as today, which is why I didn't wait until the end of the day to buy.
NASDAQ:AVGO had a similar but even more historically extreme setup but I didn't find it until after the market closed last night and it opened sharply lower, so I missed my chance there.
I went long the Oct 4 $52 puts that cost me .25 with the stock at 52.99 and I will sell as soon as they are profitable at the end of a trading day. Maybe sooner if a drop happens this afternoon.
This is market based edutainment and involves a system still undergoing testing, so it is not intended as investment advice. Particularly the short date on the expiration makes it a somewhat riskier trade.