I´d suggest not to look at that in isolation. It´s one factor, but others might point at least longer(!) term to a different direction (Zeelotes always warns about using one indicator in isolation instead of a bunch of them, combined, to get the full picture).

For me the question still is whether such a rally is not followed by a big pullback if it leads BRK to the upper border of it´s longterm Price/BV channel - or even above it as was the case in the first months of 2025. In all those cases BRK rallied strongly - only to come back to the middle of the range within a year.

Hi Said,

You may have misunderstood me. I am fully aligned with you that as a result of this rally, BRK is above it's normal trendline so mean reversion would suggest that over the next say 3-6 months, the probably has increased that it may trend lower. This is the reason I am opening a short call position in the first place.

The rally trend I was referring to is just looking at the much shorter term for an opportune time to open that short call position. No point opening it if day-by-day, the price continues to rise.

Just on a separate note about the use of options:
- A long PUT position as you have been entering is a bearish position on BRK.
- A short [covered] CALL position as I have been entering is also a bearish position on BRK.

I'm sure there are many benefits and disadvantages to each approach, but one advantage with selling calls is that I am selling time value and the natural decay of time value as expiration day approaches is a gain for me. With buying PUTS, you are buying time value and the natural decay of time value as expiration day approaches is a loss for the holder of the PUTS.

Also, if your interest is to sell time value, this peaks ATM which is why I have been selling ATM calls. As the underling price moves away from the strike, this also results in a reduction in the time value - i.e. a gain for me. This approach does mean that if I prefer that my shares are not called away, I may have to roll the options up and out as expiration approaches to minimize this risk.

StevnFool