Here is your Bonus Idea with links to the full Top Ten:
Amgen, $AMGN, has traded in a range between 165 and 195 for nearly a year. Back and forth. So how does this offer opportunity to profit? Range Trading. The stock is currently turning up off of the bottom of the range, heading towards the top. The RSI is trending higher toward the bullish zone with the MACD approaching zero. The Bollinger Bands® are also turned to the upside.
There is resistance at 178 and 181 then 188 and 192 before the top of the range at 198. Support lower sits at 174 and 171 then 166. Short interest is low at 1.4%. The company is expected to report earnings next in late July so that will not get in the way of a trade. The stock does pay a dividend at a nearly 3% yield though and the stock trades ex-dividend beginning May 16th.
The weekly options show more calls than puts and they are spread from 170 to 187.50. The puts are spread from 165 to 177.50. Next week expiry options are similar but with lower open interest, ranging from 172.50 to 185 on the call side and from 165 to 177.50 on the put side. The May monthly options have the biggest open interest and show more on the put side, ranging from 155 to 180. Calls span from 170 to 200.
Trade Idea 1: Buy the stock on a move over 178 with a stop at 174 looking for a move to 196.
Trade Idea 2: Buy the May 11 Expiry 177.50 Calls for $3.55.
Trade Idea 3: Buy the May 18 Expiry 177.50/185 Call Spread for $2.55.
Trade Idea 4: Buy the May 18 Expiry 165/177.5/185 Call Spread Risk Reversal for $2.00.
After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with the calendar about to turn from April to May sees the equity markets are floundering. They could sure use some May flowers after all the spring rain. Elsewhere look for Gold to continue its broad consolidation while Crude Oil remains in an uptrend. The US Dollar Index is showing signs of life and attempting to reverse higher while US Treasuries are bouncing in their downtrend.
The Shanghai Composite looks weak and possibly on the verge of a big move lower while Emerging Markets continue to churn at the highs. Volatility looks to drip lower and out of the nearly 3 month range, which would be a positive for equities. The equity index ETF’s SPY, IWM and QQQ, all seem stuck in tightening consolidation and holding over important support on the longer timeframe. Use this information as you prepare for the coming week and trad’em well.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.