4 Trade Ideas for CBOE: Bonus Idea

CBOE, $CBOE,found support in December but could not show any strength to rise out of it until April. It moved higher to a top in June and pulled back, It was a shallow pullback and reversed in the beginning of July to a top at the November peak. Another pullback found support at a higher low and reversed. Friday it pushed through resistance and closed at a higher high.

The RSI is rising and bullish with the MACD about to cross up and positive. The Bollinger Bands are also opening higher. There is resistance at 124.30 then 127.65 followed by 137.50. Support lower comes at 115.25 and 112.25 before 109.25. The stock pays a dividend with a 1.24% yield and starts trading ex-dividend August 29th. The company is expected to report earnings next on October 31st.

The August options chain show the biggest open interest on the 115 call. In September the biggest open interest is by far at the 120 call. The December options, the first to cover the next earnings report are just getting started but show action at the 120 call and 110 put.

CBOE, Ticker: $CBOE

Trade Idea 1: Buy the stock now (over 115.25) with a stop at 115.25.

Trade Idea 2: Buy the stock now (over 115.25) and add a September 115/105 put spread ($2.40) while selling the December 125 calls ($2.30).

Trade Idea 3: Buy the September/December 120 call calendar ($4.40) and sell the September 110 puts ($1.50).

Trade Idea 4: Buy the December 110/120 bull risk reversal (2$2.20).

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 the dog days of August saw that equity markets had been dinged despite an accommodative FOMC.

Elsewhere look for Gold to move higher while Crude Oil continues to head lower. The US Dollar Index also looks to strengthen while US Treasuries are biased to continue higher. The Shanghai Composite looks to continue lower in the short term while Emerging Markets resume a downtrend.

Volatility looks to move higher putting a bias lower for the equity index ETF’s SPY, IWM and QQQ. Their charts also point to some short term weakness, especially in the SPY and QQQ. Long term the SPY and QQQ still remain strong with the IWM stuck in a range.  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.