Here is your Bonus Idea with links to the full Top Ten:
Colgate-Palmolive, $CL, started to move lower with a gap down in January. It found support in February and moved mainly sideways for almost 3 months, building an expanding wedge. In April it fell to the bottom of that wedge fast, broke it, and then continued lower. It bottomed in mid-May and started to consolidate again. Price began to move up and met resistance at the end of May. It fell back to a higher low at the 20 day SMA and reversed to a higher high. Some small body consolidation and another move Friday saw it end the week at resistance and over the 50 day SMA for the first time since mid-April.
Momentum started to diverge to the upside at the May bottom with the RSI rising along with the MACD. The MACD is now turning positive. The Bollinger Bands® have also turned upward. There is resistance at 65 and then 66.30 and 67.65 before 68.30 and 71 then 72.55. Support lower comes at 63 and 61.65. Short interest is low at 1.4%. The company is expected to report earnings next on July 27th. The stock goes ex-dividend on July 17th and currently sports a 2.60% dividend yield.
The July 13 Expiry options chain shows biggest open interest at the 61.50 put strike. The July monthly options show biggest open interest on the put side at the 60.50 strike. On the call side it is bigger at 66 and 67.50 but biggest at 70. The July 27 Expiry, the first to include the earnings report, shows the only sizable open interest at the 63.50 strike. The August monthly options show open interest from 57.50 to 62.50 on the put side and spread from 62.50 to 80 on the call side.
Trade Idea 1: Buy the stock on a push over 65 with a stop at 62.50.
Trade Idea 2: Buy the stock on a move over 65 and add a July 27 Expiry 63/61 Put Spread (71 cents) selling the August 70 Calls (44 cents).
Trade Idea 3: Buy the August 60/67.50 bull Risk Reversal (44 cents).
Trade Idea 4: Buy the July/August 67.50 Call Calendar (72 cents) and sell the July 62.50 Puts (45 cents) to lower the cost.
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 Summer officially started and only one week left in the second quarter saw stocks looking to enter the last week with a bit of weakness in the short term but remain strong in longer timeframes.
Elsewhere look for Gold to continue lower while Crude Oil reverses and resumes the uptrend. The US Dollar Index is pausing in its uptrend while US Treasuries continue to mark time moving sideways. The Shanghai Composite and Emerging Markets both continue to look weak and ready for more downside. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts show consolidation or minor pullbacks in the short term with the IWM and QQQ near all-time highs but the SPY continuing to lag. Use this information as you prepare for the coming week and trad’em well.