Bristol-Myers Squibb, $BMY, rose up off of support in February and made a top later that month. It pulled back, finding support eventually at a symmetrical move to the downside and bounced. Since then it has moved back higher and crossed over the prior support area. It is consolidating there with the Bollinger Bands® tightening, often a precursor to a move. The RSI is in the bullish zone, with the MACD flattening and positive.
There is resistance at 61.50 and 63.60 then 65.65 and 68 before 70. A Measured Move to the upside gives a target at 70. Support lower comes at 60 and 57.20 then 53.40 and 50. Short interest is low under 1%. The stock pays a dividend with a current yield of over 2.6%, and should not start to trade ex-dividend until early October. The company is expected to report earnings next on October 25th.
The September options chain shows the biggest open interest at the 60 strike with a strong showing as well at the 62.50 Calls and 57.50 Puts. In October it is the 62.50 strike with the biggest open interest. The October 26 Expiry chain, the first to include the earnings reporting date are just opening and have very little open interest. So you have to go the December options to see what earnings plays are being made. They show the majority of the open interest on the Call side and spread from 57.50 to 65.
Trade Idea 1: Buy the stock on a move over 61.75 with a stop at 60.
Trade Idea 2: Buy the stock on a move over 61.75 and add an October 60 Put ($1.07) while selling a December 67.50 Call (69 cents) to help fund the protection.
Trade Idea 3: Buy the September/October 62.50 Call Calendar (59 cents).
Trade Idea 4: Buy the October 57.50/65 bullish Risk Reversal (6 cent credit).
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.