Here is your Bonus Idea with links to the full Top Ten:
Visa, $V, was a strong stock, moving higher under trend resistance until it broke that to the upside in January. It ran higher form there only to pullback with the market in early February. It fell through its 50 day SMA this time, more so than previous minor pullbacks, and then reversed. It is now back at that rising trend resistance and making its way through horizontal price resistance.
A Measured Move higher would target 128.75 for an initial move. The RSI is rising and bullish with the MACD crossing up, both supporting more upside. There is resistance at 126.75 and then free air above. Support lower comes at 122.50 and 120.25 then 117.50 and 113.80. Short interest is moderate at 5.9%. The company is expected to report earnings next on April 18th.
The March options chain shows much more open interest on the call side, with it focused at 125, 130 and 135. On the put side there is smaller open interest from 120 to 121 and 115 to 116. In the April options open interest is just starting to build, but in prices indicate a range of 115 to 130 following the earnings report.
Trade Idea 1: Buy the stock on a move over 123.50 with a stop at 120.
Trade Idea 2: Buy the stock now (over 122) and add an April 120/115 Put Spread ($1.38) as protection, selling the April 130 Call ($1.09) to pay for most of the protection.
Trade Idea 3: Buy the April 115/125 Bull Risk Reversal ($1.68).
Trade Idea 4: Buy the April 125/March 126 Call Diagonal ($2.16).
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 last days of February sees the equity markets have recovered much of the downturn and are looking stronger.
Elsewhere look for Gold to bounce around in a wide range while Crude Oil resumes on the path higher. The US Dollar Index is pausing in its downtrend while US Treasuries are biased lower. The Shanghai Composite and Emerging Markets both look to continue higher.
Volatility looks to continue to drift lower toward the range that held it for the last couple of years, but remaining above it. This is easing the pressure on the equity index ETF’s SPY, IWM and QQQ. Their charts show the QQQ with the strongest recovery and looking to resume the long uptrend. The SPY and IWM are still holding under critical levels and are showing less positive conviction at this point. Another positive week could end that. 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.