Stocks have been edging higher in three of the last four sessions, including a 247-point surge in the DOW on August 29 and a combined 210-point gain on August 31 and September 4. Given the rebound, the tech-laden NASDAQ is back above 2,600 and it is up 8.9% this year, followed by the DOW at plus 7.91%. Improved sentiment indicators support the rally although they are still at the bullish level.

 With the rebound, this may be another opportunity to take some profits given that we could see some profit taking in the upcoming sessions.

 Given the uncertainty of the rally, you want to make sure you don't leave yourself exposed to overbought selling should markets continue to rise. If you own stocks or index securities that made some decent gains, you might be wondering what to do.

 Let's say you own a basket of technology stocks that have moved in line with or are better than the overall markets. A good strategy would be to take some profits. At the same time, you do not want to miss out on any potential gains that may occur as we move into what may be decent earnings in the third and fourth quarters.

 A simple strategy that you may want to consider is to take some profits off the table and then use some of the profits to buy index call options -- a bullish play on a stock index.

 First, take some profits on your basket of stocks. Second, buy some index calls so that you will continue to partake in any potential upside moves in the markets.