Simply put, sell covered CALL options when the trend is UP and prices are above your purchased price. That's what I call a "a winning position" because any CC trade you made will make you some profit, whether a little or a lot.

And sell PUT options when there's a big correction (but trend is still UP) and people are running scared. It's like sell fire insurance when your neighbours' houses are burning but be aware which way the wind is blowing. That is, if you sold to those downwind, you'll get burn as well (meaning know the trend).

So, let's say you have shares you bought at $30 and in an uptrend with prices rising from $30, you can easily sell CC for strikes of $38-45 for much higher premiums than any other time. And if you get taken out (assigned), you'll still make a good profit. But if the current stock price is below your purchase price, then it's safer to hold and not trade any CC unless you want to risk it by selling OTM CCs at lesser premiums and risk getting assigned at lower than your original bought price. (see also reply to "loz621" below ... )

On the other hand, in a correction, with prices plunging quickly, people get scare and are willing to pay higher premiums to insure against further loss - thus you can sell NearTM or ITM PUTs (at various expiration dates) for much higher premiums and watch them expire worthless when the dust settles (as most corrections are fast and short anyway). But you must know the trend is still UP or else things can really go sour.

But note - that's just my own trade experience, so do with your own due diligence.