Cheap Stock, Cheap ETF to Consider

I buy the stock regularly several times a month. On a post-earnings pullback I will buy more. I am thinking about selling the TWX May $37 or $38 put early this week as a way generate income and maybe even get long on weakness.

TWX closed Friday's session at $38.09, just over $1.00 shy of its 52-week high. If the stock jumps after earnings expect it to retest that level, but proceed with caution.

Last quarter, Time Warner reported earnings on Feb. 8. It beat estimates on Harry Potter-related strength, increased its dividend and introduced a $4 billion share buyback program. That's the day the stock hit its 52-week high of $39.24. It traded as low as $37.90 after opening at $38.53. TWX ended the day down from the open, closing the session at $38.11. That renders it just about flat over the last three months.

As such, it might not be a great idea to jump too soon on strength. Wait for a natural pullback before opening a new position or consider doing it on a dip below $38.00 prior to earnings.