Anthem, $ANTM, started to move higher in October 2017 and met resistance with a spectacular blow off candle at the end of January. It continued to pullback from there, finding support in March and consolidating for 2 months. It started higher again in June and last week reached the January high again, where it stalled.
The RSI is bullish and a tad bit overbought with the MACD bullish and rising. The Bollinger Bands® are opening to the upside to allow a move. There is no resistance above 260. Support lower comes at 252 and 246 then 238.50 and 234.25. Short interest is low at 1.5%. The stock pays a small 1.15% dividend and will begin trading ex-dividend on September 7th. The company is expected to report earnings next on October 31st.
The August monthly options suggest little price movement this week with the largest open interest at the 260 call strike. The September options show biggest open interest from 250 to 270 on the call side. The December options, the first to expire after the next earnings report, already have more open interest at the 270 call strike than any previous expiry has high open interest. They are pricing a 9.25% move in the stock price by December expiry.
Trade Idea 1: Buy the stock on a move over 260.50 with a stop at 255.
Trade Idea 2: Buy the stock on a move over 260.50 and add a September 260/250 Put Spread ($3.65) while selling the December 290 Call ($2.45) to cover most of the cost.
Trade Idea 3: Buy the September/December 270 Call Calendar ($6.00) and sell the September 240 Put ($1.05) if you want to lower the cost.
Trade Idea 4: Buy a December 240/260/270 Call Spread Risk Reversal (30 cents).
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 heading into August Options Expiration week, sees the equity markets continue to look strong on the longer timeframe, but may need a rest in the short run.
Elsewhere look for Gold to possibly pause in its downtrend while Crude Oil bounces at support after a pullback on the uptrend. The US Dollar Index is breaking out to the upside and looks strong while US Treasuries are bouncing in consolidation. The Shanghai Composite may be ready to pause in its downtrend while Emerging Markets continue lower.
Volatility looks to remain low but creeping up into the teens removing the aid it has been giving to equities. The equity index ETF’s SPY, IWM and QQQ, all look strong on the weekly timeframe. But on the shorter charts the SPY may continue the short term pullback along with the QQQ while the IWM consolidates at the highs. Use this information as you prepare for the coming week and trad’em well.