Intercontinental Exchange, $ICE, pulled back to its 200 day SMA in February. From that low it created a channel as it ran higher over the next 9 months, making an all-time high on an intraday basis at the start of last week. It pulled back from that high the rest of the week, finding support and consolidating.
The RSI is falling through the mid line while the MACD has crossed down and is dropping. It is sitting on the lower Bollinger Band® now as they have squeezed in. There is support lower at 78 and then 76 followed by 74.70 and 72.50. There is no resistance above 82.40. Short interest is low at just 1%. The stock pays a 1.22% dividend and starts to trade ex-dividend December 13th. The company reports earnings next on February 7th.
The December options chain shows the biggest open interest below at the 75 Put strike. On the Call side it is half the size but biggest at the 80 strike. January options have decent open interest from 50 to 70 and then the biggest at 75 before a drop to 80 on the Put side. The Call side has a very large slug of open interest at the 80 strike. The March options, the first covering the earnings date, build to a peak at the 80 Put and it is focused near 80 on the Call side.
Trade Idea 1: Sell the stock short on a move under 78 with a stop at 79.
Trade Idea 2: Sell the stock short on a move under 78 and buy a December 80 Call ($0.85) for protection.
Trade Idea 3: Buy the December 77.50 Put ($1.10).
Trade Idea 4: Buy the December 77.50/January 72.50 Put Diagonal (55 cents, Buy December, Sell January)
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 only 2 full weeks left in the trading year sees equities unable to shake out of this pullback and some sectors looking as they may be worsening.
Elsewhere look for Gold to continue to move higher while Crude Oil is poised to bounce in its downtrend. The US Dollar Index continues to consolidate while US Treasuries move up in a short term trend. The Shanghai Composite continues to show signs of a possible consolidation in its pullback with Emerging Markets continuing their long term downtrend.
Volatility looks to remain above recent ranges and possibly poised to move higher, adding pressure to equity prices. The equity index ETF’s SPY, IWM and QQQ, responded by reversing their recent mini recoveries and turning lower. The IWM looks the worst as it is now resuming a downtrend while the QQQ is next in a short term downward channel, with the SPY holding in a consolidation 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.