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In my previous post, I shared [how I screen for deeply undervalued stocks](https://www.reddit.com/r/thetagang/comments/1prf7os/my_stock_screening_process_for_selling_csps/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button) before selling cash-secured puts. One thing I’ve learned is that valuation alone isn’t enough, **timing matters a lot**, especially if the goal is to reduce assignment risk and improve premium quality.
Even a deeply undervalued stock can keep drifting lower. So after a stock passes my fundamental filter, I add a **technical validation step** before opening a CSP.
# How I Validate Timing
For timing, I use a [Mean Reversion Channel](https://www.tradingview.com/script/5uaoczeP-Mean-Reversion-Channel-fareid-s-MRI-Variant/) indicator on TradingView.
My rule is simple:
* I only consider selling CSPs when price is **inside the lower shaded band**
* Timeframe: **1D**
* I prefer choosing strike prices **inside or below that lower band**
The idea is not to catch bottoms, but to sell premium when price is already stretched to the downside relative to its recent range.
# Example 1 - ACN (No Trade)
Using **Accenture (ACN)** from my previous post. ACN was one of the stocks that passed my deep value screen. Fundamentally, ACN passed my deep value screen. However, on the daily chart, price was **far above the lower MRC band**. In this case, even though valuation looked attractive, I would **skip this trade**, timing didn’t support mean reversion.
# Example 2 — PDD
PDD was another stock that showed up in the screener, with an average valuation gap of around **15%**. On **Dec 20, 2025**, PDD was trading **inside the lower shaded band** on the daily chart. That combination (deep value + downside stretch) made it a much better candidate for selling CSPs.
Since then, price has already bounced somewhat, which is exactly the type of behavior this filter is trying to capture.
https://preview.redd.it/42945yixssag1.png?width=2618&format=png&auto=webp&s=55ea6e82c86a51529e58b7d840681cdf0aef40da
# Where This Fits in My Overall Process
So my flow looks like this:
1. Deep Value Fundamental Screen
2. Timing Validation using Mean Reversion
3. Finding the Best Options Deal to Open a Position
4. Trade Management
I’ll go into next steps in a separate post. As always, this is just what has worked for me so far. If you use a different timing filter (RSI, IV rank, etc.), I’d be interested in hearing how you integrate it with fundamentals.