Two Stocks From the Bull Strangle Watchlist Showing Interesting Setups

Two Stocks From the Bull Strangle Watchlist Showing Interesting Setups

Income-focused options traders often prioritize structure over strategy. Before selling premium, the most important step is identifying stocks with stable price behavior, strong liquidity, and clearly defined technical levels. This is the goal of the Bull Strangle Watchlist—a curated list of stocks that exhibit the characteristics needed for structured options income strategies. These stocks typically show orderly price movement, clear support zones, and strong options liquidity, making them candidates for selling out-of-the-money options.

Two stocks currently appearing on the watchlist are MGM Resorts International and Southwest Airlines. Both have recently developed technical setups that options traders often monitor closely.

MGM Resorts International Showing Signs of Stabilization

MGM Resorts International (MGM) has recently entered a recovery phase after a volatile stretch earlier in the year. The stock pulled back into the low-$30s, then rebounded and began to form a pattern of higher lows, suggesting buyers are gradually stepping back into the market. Recent price action shows MGM stabilizing in the mid-$30s while reclaiming several short-term moving averages. This stabilization is reinforced by a rising trendline that has supported the most recent advance.

While momentum remains uneven, pullbacks have become more contained, and price behavior has turned more orderly. As long as MGM holds above the developing support zone in the mid-$30s, the near-term structure remains constructive and could support gradual upside or sideways consolidation.

For options income traders, stocks exhibiting this type of stabilization often provide opportunities to sell out-of-the-money puts beneath developing support levels while maintaining a margin of safety.

Southwest Airlines Pulling Back Toward Support

Southwest Airlines (LUV) has recently shifted from a strong advance into a corrective pullback. The stock rallied from the low-$30s to the mid-$50s before retracing quickly toward a prior support zone in the low-$40s. This area previously served as a consolidation region during the earlier phase of the rally and may now act as a technical support level.

The decline has pushed LUV below several short-term moving averages, reflecting a loss of near-term momentum after the extended move higher. However, the broader structure still resembles a stock correcting after a strong advance rather than entering a longer-term breakdown.

For options traders, pullbacks toward prior support zones can sometimes present opportunities to sell premium with strikes positioned well below key technical levels.

Why the Watchlist Matters

Successful options income strategies rarely start with option pricing. They begin with stock selection. The Bull Strangle Watchlist focuses on stocks that typically display:

• Strong options liquidity
• Clear technical support levels
• Relatively stable price behavior

These characteristics help create a structured environment for selling premium while maintaining disciplined risk management. Not every stock will qualify at any given time. The watchlist evolves as market conditions change and new technical setups emerge.

The Bull Strangle Framework

The watchlist is one component of the broader Bull Strangle Strategy, a structured approach to trading stock-backed options for income. The framework focuses on selling out-of-the-money puts and calls on fundamentally strong stocks while maintaining strict position structure and time diversification. The strategy emphasizes:

• Consistent entries over time
• Multiple expiration cycles working simultaneously
• Selling premium on high-quality stocks
• Structured risk management

Learn More

The Bull Strangle Newsletter provides weekly watchlists, trade ideas, and structured insights into the stock-plus-options framework used in the strategy.

For a deeper explanation of the methodology, the full approach is detailed in the book “The Bull Strangle Strategy.”

Together, the book and newsletter explain how traders can combine stock selection, structure, and disciplined premium selling to build a consistent options income process.