📈 I don’t chase the market when everything is flying. When the major indexes are near all-time highs, I know it can be tempting to jump into whatever is already running. But that is not how I like to invest. My Options Puppy approach is simple: when the market becomes expensive and crowded, I start looking for the stocks and ETFs that have been rotated out of instead. 🐶💰
🔄 What does “rotated out” mean? It simply means investors have moved money away from a particular stock, sector or ETF and into another part of the market. It does not automatically mean the stock is cheap or that it will rebound. Sometimes investors rotate out because the business has genuine problems. My job is therefore not to blindly buy the loser. My job is to ask: “Has the price fallen more than the underlying business deserves?” 🤔📊
🎯 This is the difference between chasing and waiting. If a stock has already gone up 50%, I may be paying a premium because everyone is excited. If another quality business has fallen 20%, 30% or more because sentiment changed, I can start investigating whether the sell-off has created an entry opportunity. The important word is investigating. A falling price alone is never my buy signal.
🐶 My Options Puppy Rule: I Don’t Chase Green Candles
🟢 When everyone is excited, I become patient. Markets can stay strong for much longer than expected, so I don’t try to predict exactly when an all-time-high market will correct. Instead, I keep a watchlist. My watchlist contains companies and ETFs that I understand and would be interested in owning if their valuation, fundamentals and technical setup become more attractive.
💰 Cash becomes ammunition. For me, holding cash is not necessarily doing nothing. It gives me flexibility. If the market continues climbing, I don’t need to feel FOMO. If a stock I like suddenly falls because of sentiment, I have capital available to investigate the opportunity.
📉 My favourite situation is not necessarily a stock at its lowest price. I prefer seeing a stock that has fallen, stabilised and started showing evidence that sellers are losing control. That is where fundamental analysis and technical analysis work together.
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🎄 1. Netflix — One of My Christmas Watchlist Stocks
🍿 Netflix is a good example of what I mean by a rotated-out stock. Netflix has faced a significant repricing in 2026. Recent reporting showed the shares around $73, while the stock had traded substantially higher earlier in the cycle. A September 2026 report from Barron’s noted that Netflix had fallen about 20% year-to-date at that point, while another report highlighted concerns surrounding engagement and the lack of a major breakout original hit.
🐶 But I don’t look only at the falling share price. I ask what is happening inside the business. Netflix reported second-quarter 2026 revenue of $12.56 billion and an operating margin of 33.4%. The company also continued investing heavily in content while generating substantial cash flow.
📺 Advertising is another part of my thesis. Netflix has been building its advertising business, and management has been targeting approximately $3 billion of advertising revenue in 2026. Recent reporting also highlighted expansion of AI-powered advertising tools and programmatic advertising capabilities.
💵 Buybacks also matter. Netflix repurchased approximately $4.7 billion of shares during the second quarter, according to reporting on its results, while maintaining a large remaining repurchase authorisation. Buybacks don’t guarantee that the stock rises, but reducing the share count can support earnings per share when the underlying business continues generating cash.
⚠️ However, I don’t pretend Netflix has no problems. Revenue growth has slowed compared with earlier periods, and analysts have raised concerns about engagement and content momentum. That is exactly why Netflix is interesting to me as a watchlist candidate rather than a guaranteed winner. I want to see whether the fundamentals stabilise before becoming more aggressive.
📊 My TA approach would be simple. I watch for the stock to stop making lower lows. Then I look for a higher low, followed by a break above a previous short-term resistance level. If price is still falling aggressively, I don’t need to catch the exact bottom. I can wait.
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🎁 2. Hasbro — My Other Christmas Stock
🎲 Hasbro is a completely different type of opportunity from Netflix. Instead of a streaming company, I am looking at a consumer, gaming and intellectual-property business. That makes it useful for diversification within my watchlist.
🃏 The important part of the Hasbro story is Wizards of the Coast and Magic: The Gathering. Hasbro reported that second-quarter Magic: The Gathering revenue rose 32% to $545.3 million. Total gaming revenue increased 23% in the quarter.
📈 Hasbro also raised its 2026 outlook. The company now expects total revenue growth of 5%–7% in constant currency and adjusted operating margin of 25%–26%, compared with its previous 3%–5% revenue-growth and 24%–25% margin outlook.
💰 That is what makes Hasbro interesting to me. The share price can sometimes be influenced heavily by the traditional toy business, while the market may underestimate the value of its gaming franchises and intellectual property. If the gaming business continues performing well, the earnings mix could become increasingly important.
⚠️ But there are risks. Hasbro’s entertainment segment remained weaker, and the company has also dealt with cybersecurity-related costs and disruption. Consumer products can face tariff, input-cost and margin pressures.
🐶 So my Options Puppy mindset is not “Hasbro fell, therefore buy.” Instead, I ask whether the improved earnings outlook is sustainable and whether the share price gives me enough room for error.
📊 For TA, I want to see support hold. If Hasbro falls into a previous support area and volume begins to dry up on the decline, I start paying attention. If it subsequently breaks above resistance, that can provide confirmation that the rotation out may be reversing.
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🇨🇳 3. KWEB — When China Is Out of Fashion
🌏 KWEB gives me a completely different type of rotated-out opportunity. Instead of owning one company, I am looking at an ETF containing Chinese internet companies. That means I am taking sector and country exposure, not simply betting on one individual business.
🐶 This is important for beginners. An ETF can reduce individual-company risk, but it does not eliminate market risk. If Chinese technology stocks are weak as a whole, KWEB can fall even if one or two holdings perform well.
🔄 This is exactly why I watch rotation. When investors are obsessed with US AI stocks, capital can move away from other markets. A neglected ETF can remain cheap for a long time. But if sentiment toward China improves, money can rotate back into the sector.
📊 My technical approach to KWEB is therefore very simple. I look for established support and resistance. If support holds repeatedly, I become interested. If KWEB breaks resistance with stronger volume, I become more interested. If support fails decisively, I don’t tell myself that it must rebound just because it has already fallen.
💡 For me, KWEB is a patience trade. I don’t need to predict exactly when Chinese internet stocks will turn around. I can build a watchlist and wait for the price action to tell me that demand is returning.
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🥇 4. IAU — When Gold Becomes the Hedge in My Portfolio
🥇 IAU is different again because it gives me gold exposure rather than a traditional operating company. That means I don’t analyse it in exactly the same way as Netflix or Hasbro.
📉 When risk appetite changes, gold can behave differently from growth stocks. Interest rates, real yields, the US dollar, geopolitical risk and investor demand can all affect gold prices. Therefore, I use IAU as part of my portfolio framework rather than treating it like a normal company.
🐶 My Options Puppy approach is to think in terms of rotation. If money is rushing into technology and growth stocks, I don’t necessarily want my entire portfolio concentrated there. Having exposure to a different asset can give me another source of diversification.
📊 With IAU, I watch the gold trend rather than company earnings. I look at the moving averages, previous support and resistance, momentum and whether the gold trend remains intact. If gold has already gone vertical, I don’t automatically chase it. If it pulls back toward a meaningful support area while the longer-term trend remains constructive, I become more interested.
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🎄🐶 My Christmas Watchlist: NFLX + HAS + KWEB + IAU
🎅 This is why I call these my Christmas watchlist ideas. I am not saying that these four assets will definitely rise. Instead, they represent four different situations that I can monitor when the broader market is expensive or crowded.
Watchlist What I am watching
🍿 Netflix Growth + advertising + cash flow + technical recovery
🎲 Hasbro Magic/Wizards growth + margins + consumer recovery
🌏 KWEB China internet rotation + support/resistance
🥇 IAU Gold trend + diversification + macro conditions
🐶 The Options Puppy lesson is simple: I don’t need to buy everything. I can build a list, wait for the price to come to me and then decide whether the fundamentals and technicals justify an entry.
📚 Beginner Guide: How I Hunt Rotated-Out Stocks
1️⃣ First, I find what the market is ignoring. I look for sectors or companies that have underperformed while the major indexes remain strong.
2️⃣ Second, I investigate WHY they fell. This is the most important step. A falling stock can represent either an opportunity or a deteriorating business.
3️⃣ Third, I check the fundamentals. Revenue, earnings, margins, free cash flow, debt, guidance and catalysts tell me whether the business is improving or deteriorating.
4️⃣ Fourth, I check the technical chart. I mark support, resistance, moving averages and recent highs and lows. I want evidence that sellers are becoming less aggressive.
5️⃣ Fifth, I scale instead of going all-in. If I like the setup but there is still uncertainty, I don’t need to use all my capital immediately.
6️⃣ Sixth, I define what would prove me wrong. If the business deteriorates or important technical support breaks, I reassess. Being wrong is part of investing; refusing to admit that I am wrong is the expensive part.
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🐶🎄 My Options Puppy Philosophy
📈 When the market is at all-time highs, I don’t feel pressured to chase. There will always be another opportunity. The market is a huge supermarket with thousands of stocks and ETFs. If one aisle is crowded, I can walk to another aisle.
🔄 Rotation creates opportunities, but rotation is not a buy signal. Netflix, Hasbro, KWEB and IAU each have completely different businesses, risks and catalysts. What connects them in my watchlist is the idea of looking where the crowd isn’t looking, then doing the homework.
🎯 My goal isn’t to buy the cheapest stock. My goal is to find a reasonable price for a business or asset that has a credible reason to recover. I combine FA with TA, then wait for confirmation.
🎅 So while everyone else is chasing the Christmas rally, Options Puppy is sitting quietly with my watchlist. Netflix 🍿, Hasbro 🎲, KWEB 🌏 and IAU 🥇 are four names I can monitor. I don’t have to catch the bottom. I don’t have to buy because something has fallen. I wait for the setup. I wait for the price. And when the opportunity comes, I let my cash do the barking. 🐶💰
This is an educational watchlist framework, not a prediction that any of these securities will rise. Prices and fundamentals can change quickly.
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