Markets are believed to be rational... here is a case to consider.

Asset prices are determined by the crowd, a crowd with mood swings.

We have one of these opportunities today with $124 billion tobacco giant Philip Morris (PM)…

Philip Morris makes some of the world's top cigarette brands.

PM is very successful with 26% profit margins over the past 12 months. And its earnings per share and free cash flows are on the rise.

RSI extremes have been a good indicator for Philip Morris. And since falling into oversold territory the share price has stablized.

Shares have stopped falling and a 5.7% dividend will attract new investors.

Now that shares stopped falling, this big yield will likely start to attract investors again. And their buying should support shares.

Take advantage of the weak hands today.

Trade suggestion:
Sell the August 17, $77.50 puts on Philip Morris for $2.05.

If Philip Morris trades above $77.50 through August 17, put sellers will keep the $2.05. A 16.9% annualized return.

If Philip Morris closes below $77.50 on expiration day, put sellers will buy shares at a 6.4% discount.

Use stop loss at $70.

Below $70, PM would be at multiple year lows. Exit the position for a small loss.

Is a strong business that faces a few headwinds worth $67 billion less today than it was one year ago?

The stock has overreacted and past extremes have faded and reversed. Selling puts is a great way to profit if history repeats.

Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.

P.S. Trade updates:

Coffee franchise Starbucks (SBUX) announced yesterday that it expects a disappointing same-store sales to grow at 1% for the current quarter. The company plans to close about 150 stores in the next year.

Shares fell 9.1% to a 10-month low of $52.22 on the news. Watch our stop loss level at $51.

This is an overaction to the announcement, however, stick to the plan and close the trade at the stop loss.
https://steemit.com/stock/@slider2990/turn-a-world-wide-popular-brand-into-cold-hard-cash

Luxury retailer Tapestry (TPR) has continued to rise off its support. If you sold the July 20, $45 puts on my recommendation, you're on track to earn 2.3% in six weeks or 19.8% annualized. Hold the position with a stop loss at $39.75.
https://steemit.com/money/@slider2990/earn-a-quick-cash-payout-with-this-luxury-brand